Crane Company purchased equipment that cost $3250000 on January 1, 2017. The entire cost was recorded as an expense. The equipment had a 9-year life and a $111000 residual value. Crane uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2019. Crane is subject to a 40% tax rate.

Before the correction was made and before the books were closed on December 31, 2019, retained earnings was understated by

$1456950.

$1950000.

$1531466.

$1439511.