14. Elvis Company was organized on January 1, 2006. After 2 years of profitable operations, the equity section of the statement of financial positionwas as follows: (V9-29)

Contributed capital:

Share capital, P5 par, 600,000 shares authorized,

200,000 shares issued and outstanding P1,000,000

Share premium 6,000,000

Retained earnings 2,800,000

Total shareholders' equity P9,800,000

During 2008, the following chronological transactions affected shareholders' equity:

* Reacquired 10,000 shares at P30 per share to be held as treasury.

* Declared and issued a 30% stock dividend.

* Declared and paid cash dividend of P10 per share.

* Net income for 2008 amounted to P3,000,000.

______What is the unappropriated balance of retained earnings on December 31, 2008?

a.P 2,745,000b.P3,045,000c. P2,700,000d.P 2,600,000