Required Information [The following information applies to the questions displayed below.] Sanchez Company engaged in the following transactions during Year 1: 1) Started the business by Issuing $12,500 of common stock for cash. 2) The company paid cash to purchase $7,600 of Inventory. 3) The company sold Inventory that cost $5,000 for $10,150 cash. 4) Operating expenses incurred and paid during the year, $4,500. Sanchez Company engaged in the following transactions during Year 2: 1) The company paid cash to purchase $10,800 of Inventory. 2) The company sold Inventory that cost $9,200 for $16,750 cash. 3) Operating expenses incurred and paid during the year, $5,500. 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? Multiple Choice $12,200 $2,700 $7,500 $2,050