At January 1, 2020, Benoit Ltd. had a credit balance of $1,525,000 in its retained earnings account. During the year, Benoit Ltd. paid $137,500 in dividends, reported net income of $210,000. The December 31 balance of retained earnings is 1) $1,387,500 2) $1,597,500 3) $1,222,500 4) $1,972,500