On January 1, 2016, Kittson Company had a retained earnings balance of $218,600. It is subject to a 30% corporate income tax rate. During 2016, Kittson earned net income of $67,000, and the following events occurred:

Oct. 1	Cash dividends of $3 per share on 4,000 shares of common stock were declared.
Oct. 10	October 1 declaration of dividends was paid.
Nov. 1	A small stock dividend was declared. The dividends consisted of 600 shares of $10 par common stock. On the date of declaration, the market price of the companys common stock was $36 per share.
Nov. 10	November 1 declaration of dividends was paid.
Dec. 1	The company recalled and retired 500 shares of $100 par preferred stock. The call price was $125 per share; the stock had originally been issued for $110 per share.
Dec. 31	The company discovered that it had erroneously recorded depreciation expense of $45,000 in 2015 for both financial reporting and income tax reporting. The correct depreciation for 2015 should have been $20,000. This is considered a material error.

Required:

1.	Prepare journal entries to record Kittson Companys transactions during 2016.
2.	Prepare Kittsons statement of retained earnings for the year ended December 31, 2016.