"It offset retained earnings"

"It" is what? Of course it also reduces retained earnings, but something has to be distributed, to affect retained earnings. You can't magically change only retained earnings.

Property? Asset? Stock? Money? Perhaps there was an Owed From Shareholder that is offset by a dividend amount? Or, some sort of trade in kind, such as, the Dentist owes the Architecture firm $50,000 and the Architect's kids all need braces?