Summer Forever Company engaged in the following transactions during 2015:

1) Started the business by issuing $42,000 of common stock for cash. 2) The company paid cash to purchase $26,400 of inventory. 3) The company sold inventory that cost $16,000 for $30,600 cash. 4) Operating expenses incurred and paid during the year, $14,000.

Summer Forever Company engaged in the following transactions during 2016: 1) The company paid cash to purchase $35,200 of inventory. 2) The company sold inventory that cost $32,800 for $57,000 cash. 3) Operating expenses incurred and paid during the year, $18,000. Note: Summer uses the perpetual inventory system.

The amount of Summer Forever's retained earnings at December 31, 2016 is:

A. $6,200

B. $26,000

C. $6,800.

D. $38,800.