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

Dividends payable	$	21,000
Treasury stock		610,000
Paid-in capitalshare repurchase		21,000
Other paid-in capital accounts		4,100,000
Retained earnings		3,100,000

During 2019, half of the treasury stock was resold for $242,000; net income was $610,000; cash dividends declared were $1,510,000; and stock dividends declared were $510,000. The 2019 sale of half of the treasury stock would:

Multiple Choice

• Reduce retained earnings by $42,000

• Reduce retained earnings by $63,000

• Reduce income before tax by $63,000

• Increase total shareholders' equity by $305,000