Wolverine, Inc. began operations on January 1 of the current year with a $11,100 cash balance. 45% of sales are collected in the month of sale; 55% are collected in the month following sale. Similarly, 15% of purchases are paid in the month of purchase, and 85% are paid in the month following purchase. The following data apply to January and February:

	January	February
Sales	$ 26,000	$ 46,000
Purchases	25,500	31,000
Operating expenses	6,100	8,100

If operating expenses are paid in the month incurred and include monthly depreciation charges of $1,600, determine the change in Wolverine's cash balance during February.

1) $575 increase.

2) $2,175 increase.

3) $7,950 increase.

4)$9,550 increase.

5) Some other amount.