Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014: 1) Started the business by issuing common stock for $7,950 cash 2) Paid cash to purchase $5,150 of inventory 3) Sold inventory that cost $3,225 for $7,700 cash 4) Incurred and paid operating expenses, $265 Schumacher Company engaged in the following transactions during 2015: 1) Paid cash to purchase $6,175 of inventory 2) Sold inventory that cost $7,450 for $16,050 cash 3) Incurred and paid operating expenses, $530 The amount of Retained Earnings at December 31, 2015 is:

$4,475.

$11,825.

$6,920.

$12,280.