Use the Following for Questions

Multiple Choice

Use the following for questions
Assume the perpetual inventory method is used.
1) The company purchased $12,500 of merchandise on account under terms 2/10,n/30.
2) The company returned $1,200 of merchandise to the supplier before payment was made.
3) The liability was paid within the discount period.
4) All of the merchandise purchased was sold for $18,800 cash.
-The amount of gross margin from the four transactions is:

A) $5,100.
B) $7,726.
C) $6,550.
D) $11,074.