Landis Energy Food Company was started by a group of investors on January 2, 20X8 when the balance sheet was made up of total assets of $10,000 and total liabilities of $3,000. Partial financial data for the first two years of operations are as follows: 20X8: Total assets (12/31) = $13,000; Total liabilities (12/31) = $4,000; Additional investments by investors = $0; Cash dividends declared and paid = $2,000. 20X9: Total assets (12/31) = $20,000; Total liabilities (12/31) = $8,000; Additional investments by investors = $2,000; Cash dividends declared and paid = $4,000. Using the above information, what was the retained earnings balance on December 31, 20X8?

A. $2,000.

B. $3,000.

C. $10,000.

D. $12,000.

E. $13,000.