The shareholders' equity section of AI Corporation as of December 31, 2017, was as follows:

Common shares, no par value; authorized 20,000 shares;

issued and outstanding 10,000 shares $100,000

Retained earnings 180,000

$280,000

On March 1, 2018, the board of AIC declared and issued a 15% stock dividend. On March 1, 2018, the fair market value of the shares was $12 per share prior to the dividend. For the two months ended February 28, 2018, AIC sustained a net loss of $20,000.

What amount should AIC report as retained earnings as of March 1, 2018?

Select one:

a.$124,000

b.$174,000

c.$144,348

d.$142,000

e.$180,000 because the stock dividend will be cancelled since there was no net income for the current period of the two months ended March 1.