Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $11,100 of common stock for cash. 2) The company paid cash to purchase $6900 of inventory. 3) The company sold inventory that cost $4300 for $8400 cash. 4) Operating expenses incurred and paid during the year, $3800. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $9400 of inventory. 2) The company sold inventory that cost $8500 for $15,000 cash. 3) Operating expenses incurred and paid during the year, $4800. Note: Sanchez uses the perpetual inventory system.What is Sanchez's gross margin for Year 2?
A. $5600
B. $1700
C. $6500
D. $8500
Answer: C
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