Seslar Corporation reported stockholders equity on December 31 of the prior year as follows:

Common stock, $5 par value, 1,000,000 shares authorized, 500,000 shares issued	$ 2,500,000
Paid-in capital in excess of par, common stock	1,000,000
Retained earnings	3,000,000

The following selected transactions occurred during the current year:

February 15	The board of directors declared a 5% stock dividend to stockholders of record on March 1, payable March 20. The stock was selling for $8 per share.
March 9	Distributed the stock dividend.
May 1	A cash dividend of $0.30 per share was declared by the board of directors to stockholders of record on May 20, payable June 1.
June 1	Paid the cash dividend.
August 20	The board decided to split the stock 4-for-1, effective on September 1.
September 1	Stock split 4-for-1.
December 31	Reported net income of $800,000 for the current year.

Prepare a statement of retained earnings as of December 31 of the current year.