Sandhills, Inc. provided the following budgeted information for March through July:

	March	April	May	June	July
Projected sales	$125480	$147600	$138000	$158400	$169720
Projected merchandise purchases	$98400	$110920	$90440	$79880	$87600
Inventory at end of month	$14400	$16280	$13640	$14920	$17240

Sandhills estimates that it will collect 30% of its sales in the month of sale and 70% in the month after the sale. General operating expenses are budgeted to be $37200 per month of which depreciation is $37200 of this amount. Sandhill pays operating expenses in the month incurred. The income tax rate is 30%. How much is budgeted net income for May?

$7337.

$5404.

$7720.

$10120.