The stockholders' equity of Concord Inc. at December 31, 2013, appears below:

Common stock, $15 par value, 200,000 shares authorized,135,000

shares issued and outstanding

2,025,000

Paid-in capital in excess of par value

1,750,000

Retained earnings

2,375,000

During 2014, the following transactions occurred:

May 10:

Declared a 10% common stock dividend when market value was $40 per share

August 31:

Issued the stock dividend declared on June 15.

December 10:

Declared a cash dividend of $2.50 per share to be paid in January 2015.

December 31:

Recognized net income of $1,087,000.

Compute the year-end balance of the retained earnings for 2014.