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 net cash flow from operating activities as a result of the four transactions is:

$5,100.

$7,726.

$6,550.

$11,074.