Brief Exercise 22-7 Your answer is partially correct. Try again. At January 1, 2017, Buffalo Company reported retained earnings of $1,841,000. In 2017, Buffalo discovered that 2016 depreciation expense was understated by $407,000. In 2017, net income was $957,000 and dividends declared were $259,000. The tax rate is 35%. Prepare a 2017 retained earnings statement for Buffalo Company. BUFFALO COMPANY Retained Earnings Statement For the Year Ended December 31, 2017 1,841,000 Retained Earnings, January 1 Less L Correction of Depreciation Error Retained Earnings, January 1, as adjusted -407,000 Add Net Income 957,000 Less # Dividends 259,000 Retained Earnings, December 31 218,100