Madison Company had net income of $75,000 for year ended December 31, 2016. On December 20, Madison declared the annual cash dividend on its 8% preferred stock (par value, $150,000) and a $0.50 per share cash dividend on its common stock (25,000 shares). As a result of the information given above, the net change in Retained Earnings in year 2016 will be:

		Increase $ 34,500
		Increase $ 50,500
		Increase $ 40,500
		Decrease $ 34,500