Phillip's Camera Store had a retained earnings balance of \(\$ 1,000\) on January 1, 2008 . For year 2008 , sales were \(\$ 10,500\) and expenses were \(\$ 6,500\). The company declared and distributed cash dividends of \(\$ 2,500\) on December 31,2008 . What was the amount of retained earnings on December 31, 2008?

a. \(\$ 4,000\)

b. \(\$ 1,500\)

c. \(\$ 2,500\)

d. \(\$ 1,500\)