Sanchez Company engaged in the following transactions during Year 1:

1. 1) Started the business by issuing $12,900 of common stock for cash.
2. 2) The company paid cash to purchase $7,800 of inventory.
3. 3) The company sold inventory that cost $5,200 for $10,650 cash.
4. 4) Operating expenses incurred and paid during the year, $4,700.

Sanchez Company engaged in the following transactions during Year 2:

1. 1) The company paid cash to purchase $11,200 of inventory.
2. 2) The company sold inventory that cost $9,400 for $17,250 cash.
3. 3) Operating expenses incurred and paid during the year, $5,700.

Note: Sanchez uses the perpetual inventory system.

The balance in the inventory account shown at December 31, Year 2 is:

Multiple Choice

• $20,400.
• $9,600.
• $1,800.
• $4,400.