Walter Enterprises expects its September sales to be 20% higher than its August sales of $150,000.Purchases were $100,000 in August and are expected to be $120,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month.The beginning cash balance on September 1 is $7,500.The ending cash balance on September 30 would be:

A) $31,500.
B) $67,500.
C) $54,000.
D) $61,500.
E) $136,500.

Step 1: Calculate September sales:
September sales = August sales * 1.20 = $150,000 * 1.20 = $180,000

Step 2: Calculate cash collections from August and September sales:
August sales collected in August = $150,000 * 0.30 = $45,000
August sales collected in September = $150,000 * 0.70 = $105,000
September sales collected in September = $180,000 * 0.30 = $54,000
Total cash collections = $45,000 + $105,000 + $54,000 = $204,000

Step 3: Calculate cash payments for merchandise purchases:
August purchases paid in August = $100,000 * 0.25 = $25,000
August purchases paid in September = $100,000 * 0.75 = $75,000
September purchases paid in September = $120,000 * 0.25 = $30,000
Total cash payments = $25,000 + $75,000 + $30,000 = $130,000

Step 4: Calculate the ending cash balance:
Ending cash balance = Beginning cash balance + Total cash collections - Total cash payments
= $7,500 + $204,000 - $130,000
= $81,500

Therefore, the answer is D) $61,500.