Mead Corporations stockholders' equity section has the following balances at December 31, 2006: the Common Stock (par value $20; authorized 75,000 shares; issued and outstanding 45,000 shares) is $900,000; Paid-in capital in excess of par value is 250,000; Retained earnings balance is 500,000. During 2007, the following transactions occurred relating to stockholders' equity:

3,000 shares were reacquired at $28 per share.

3,000 shares were reacquired at $35 per share.

1,800 shares of treasury stock were sold at $30 per share.

For the year ended December 31, 2007, Mead reported net income of $450,000. Assuming Mead accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2007, balance sheet?

$1,965,000.

$1,961,400.

$1,957,800.

$1,515,000.