As of December 31, 2018, Warner Corporation reported the following:

Dividends payable	$	24,000
Treasury stock		640,000
Paid-in capitalshare repurchase		24,000
Other paid-in capital accounts		4,400,000
Retained earnings		3,400,000

During 2019, half of the treasury stock was resold for $248,000; net income was $640,000; cash dividends declared were $1,540,000; and stock dividends declared were $540,000. The 2019 sale of half of the treasury stock would:

Multiple Choice

• Increase total shareholders' equity by $320,000

• Reduce retained earnings by $72,000

• Reduce income before tax by $72,000

• Reduce retained earnings by $48,000