1. On December 31, 2017, the stockholders' equity section of Arndt, Inc., was as follows:

   Common stock, par value $10; authorized 30,000 shares;

   issued and outstanding 9,000 shares $ 90,000

   Additional paid-in capital 116,000

   Retained earnings 194,000

   Total stockholders' equity $400,000

   On March 31, 2018, Arndt declared a 15% stock dividend, and accordingly 1,350 additional shares were issued, when the fair value of the stock was $20 per share. For the three months ended March 31, 2018, Arndt recorded a net income of $40,000. The balance of Arndts retained earnings as of March 31, 2018, should be

   	a.	$127,000.
   	b.	$194,000.
   	c.	$154,800.
   	d.	$207,000.