Sanchez Company Engaged in the Following Transactions During Year 1

Multiple Choice

Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $13,300 of common stock for cash.2) The company paid cash to purchase $8,000 of inventory.3) The company sold inventory that cost $5,400 for $11,150 cash.4) Operating expenses incurred and paid during the year, $4,900.Sanchez Company engaged in the following transactions during Year 2:1) The company paid cash to purchase $11,600 of inventory.2) The company sold inventory that cost $9,600 for $17,750 cash.3) Operating expenses incurred and paid during the year, $5,900.Note: Sanchez uses the perpetual inventory system. What is the amount of retained earnings that will be shown on the balance sheet at December 31, Year 2?

A) $2,250
B) $3,100
C) $7,900
D) $13,400