Smith Company engaged in the following transactions during2007:
1) Started the business by issuing $7,460 of common stock forcash.
2) The company paid cash to purchase $4,570 of inventory.
3) The company sold inventory that cost $3,030 for $7,370 cash.
4) Operating expenses incurred and paid during the year,$2,430.
Smith Company engaged in the following transactions during2008:
1) The company paid cash to purchase $5,790 of inventory.
2) The company sold inventory that cost $7,030 for $15,260cash.
3) Operating expenses incurred and paid during the year,$3,460.
Smith uses the perpetual inventory system.
The amount of retained earnings at December 31, 2008 is:
$8,060.
$6,310.
$7,330.
$6,680.