The following information applies to the questions displayed below.] Darlington Company entered into the following business events during its first month of operations. The company uses the perpetual inventory system.

1. 1) The company purchased $13,900 of merchandise on account under terms 2/10, n/30.
2. 2) The company returned $3,400 of merchandise to the supplier before payment was made.
3. 3) The liability was paid within the discount period.
4. 4) All of the merchandise purchased was sold for $21,800 cash.

What is the gross margin that results from these four transactions?

Multiple Choice

• $11,578

• $11,510

• $7,900

• $7,742