Presented below are the comparative income and retained earnings statements for Ivanhoe Inc. for the years 2017 and 2018.

2018 2017

Sales $337,000 $252,000

Cost of sales 181,000 132,000

Gross profit 156,000 120,000

Expenses 92,500 47,700

Net income $63,500 $72,300

Retained earnings (Jan. 1) $126,300 $77,300

Net income 63,500 72,300

Dividends (28,100 ) (23,300 )

Retained earnings (Dec. 31) $161,700 $126,300

The following additional information is provided: 1. In 2018, Ivanhoe 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 $97,500 with an estimated useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $29,250 on the assets purchased at the beginning of 2017.) 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $22,000; ending inventory for 2018 is correctly stated. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Ignore income taxes.)