7 Mayfair Corporation has outstanding 92,000 shares of $1 par value common stock as well as 20,000 shares of 9.0%, $100 par value cumulative preferred stock. At the beginning of the year, the balance in retained earnings was $750,000, and one year's dividends were in arrears. Net income for the current year is $500,000. Compute the balance in retained earnings at the end of the year if Mayfair Corporation pays a dividend of $3.0 per share on its common stock this year.

$1,070,000.

$456,000.

$614,000.

$974,000.