QUESTION 14 1. Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by issuing $12,700 of common stock for cash. 2) The company paid cash to purchase $7700 of inventory. 3) The company sold inventory that cost $5100 for $10,400 cash. 4) Operating expenses incurred and paid during the year, $4600. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $11,000 of inventory 2) The company sold inventory that cost $9300 for $17,000 cash. 3) Operating expenses incurred and paid during the year, $5600. 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? $12,500 $2800 $2100 $7600