The balance in retained earnings on January 1, 2017, for Palmer Inc. was $772,000. During the year, the corporation paid cash dividends of $88,000 and distributed a stock dividend of $7,200. In addition, the company determined that it had understated its depreciation expense in prior years by $49,000. Net income for 2017 was $112,000.

Prepare the retained earnings statement for 2017. (List items that increase retained earnings first.)