Hi, please help with the red circle part, thank you!

Exercise 22- Your answer is partially correct. Try again. Presented below are the comparative income and retained earnings statements for Crane Inc. for the years 2017 and 2018 2018 017 Sales Cost of sales Gross profit $275,000 135,000 140,000 46,800 $93,200 142,2007250 93,200 S310,000 180,000 130,000 88,600 $41,400 Net income Retained earnings (Jan. 1) Net income Dividends Retained earnings (Dec. 31) 41,400 (29,500) 154,100 (23,500) $142,200 The following additional information is provided: 1. In 2018, Crane Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2017 for $107,000 with an estimated 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $24,800; ending inventory for 2018 is correctly stated. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Tgnore income taxes.) useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $32,100 on the assets purchased at the beginning of 2017.)