Marigold Corp. had 77000 shares of treasury stock ($10 par value) at December 31, 2020, which it acquired at $12 per share. On June 4, 2021, Marigold issued 38500 treasury shares to employees who exercised options under Marigold's employee stock option plan. The market value per share was $15 at December 31, 2020, $17 at June 4, 2021, and $20 at December 31, 2021. The stock options had been granted for $14 per share. The cost method is used. What is the balance of the treasury stock on Marigold's balance sheet at December 31, 2021?

1. $539000.
2. $308000.
3. $385000.
4. $462000.