Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $10,700 of common stock for cash. 2) The company paid cash to purchase $6700 of inventory. 3) The company sold inventory that cost $4100 for $7900 cash. 4) Operating expenses incurred and paid during the year, $3600. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $9000 of inventory. 2) The company sold inventory that cost $8300 for $14,500 cash. 3) Operating expenses incurred and paid during the year, $4600. 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. $1800
B. $1600
C. $6600
D. $9500
Answer: A
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