Required information

[The following information applies to the questions displayed below.] Sanchez Company engaged in the following transactions during Year 1:

1. 1) Started the business by issuing $11,700 of common stock for cash.
2. 2) The company paid cash to purchase $7,200 of inventory.
3. 3) The company sold inventory that cost $4,600 for $9,150 cash.
4. 4) Operating expenses incurred and paid during the year, $4,100.

Sanchez Company engaged in the following transactions during Year 2:

1. 1) The company paid cash to purchase $10,000 of inventory.
2. 2) The company sold inventory that cost $8,800 for $15,750 cash.
3. 3) Operating expenses incurred and paid during the year, $5,100.

Note: Sanchez uses the perpetual inventory system.

What is the amount of inventory that will be shown on the balance sheet at December 31, Year 2?

Multiple Choice

• $1,200

• $8,400

• $18,000

• $3,800