Rolt Company began 2016 with a $130,000 balance in retained earnings. During the year, the following events occurred: The company earned net income of $76,000. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $10,360 after related income taxes of $4,440. Cash dividends totaling $11,000 and stock dividends totaling $18,500 were declared. One thousand shares of callable preferred stock that originally had been issued at $105 per share were recalled and retired at the beginning of 2016 for the call price of $115 per share. Treasury stock (common) was acquired at a cost of $23,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earnings restrictions in a note to the financial statements.

Required: 1. Prepare a statement of retained earnings for the year ended December 31, 2016.