Crane Company purchased equipment that cost $3460000 on January 1, 2020. The entire cost was recorded as an expense. The equipment had a 9-year life and a $134000 residual value. Crane uses the straight-line method to account for depreciation expense. The error was discovered on December 10, 2022. Crane is subject to a 40% tax rate. Before the correction was made and before the books were closed on December 31, 2022, retained earnings was understated by

$1531822.

$1632533.

$2076000.

$1550300.