Reference no: EM131773408

Question - Wolfe, Inc., began operations on January 1 of the current year with a $12,000 cash balance. Forty percent of sales are collected in the month of sale; 60% are collected in the month following sale. Similarly, 20% of purchases are paid in the month of purchase, and 80% are paid in the month following purchase. The following data apply to January and February:

January = Sales 35,000

Purchases 30,000

Operating Expenses 7,000

February=Sales 55,000

Purchases 40,000

Operating Expenses 9,000

If operating expenses are paid in the month incurred and include monthly depreciation charges of $2,500, determine the change in Wolfe's cash balance during February.