Rainbow, Inc. began operations on January 1 of the current year with a $12,500 cash...
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Accounting
Rainbow, Inc. began operations on January 1 of the current year with a $12,500 cash balance. Fifty percent of sales are collected in the month of sale; 50% are collected in the month following sale. Similarly, 10% of purchases are paid in the month of purchase, and 90% are paid in the month following purchase. The following data apply to January and February: Sales Purchases Operating expenses January $40,000 32,500 7,500 February $60,000 45,000 9,500 If operating expenses are paid in the month incurred and include monthly depreciation charges of $3,000, determine the change in Rainbow's cash balance during February
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