The balance sheet of Freedom Company included the following shareholders' equity accounts at December 31, 2018: 300,000 Paid-in capital: Common stock, 300,000 shares at $1 par Paid-in capital --- excess of par Retained earnings 2,475,000 8,045,000 Total shareholders' equity $10,820,000 On May 3, 2019, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $10 per share. On July 5, 2019, a 4% common stock dividend was declared and distributed. The market value of the common stock was $12 per share. On December 1, 2019, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders. Assuming net income is $700,000 for year 2019 and large stock dividend does not affect retained earnings, what is the balance of retained earnings shown on December 31, 2019 balance sheet? $8,709,000. $8,612,000. $8,545,000. $8,409,000