Tuscan Inc. had a retained earnings balance of $88,000 at December 31, 2018. During the year, Tuscan had the following selected transactions.

• Reported net income of $128,000.
• Revised an estimate of a machines salvage value. Depreciation increased by $3,800 per year.
• An error was discovered. Three years ago, a purchase of a building was incorrectly expensed. The effect is understated retained earnings of $40,000 (net of tax benefit).
• Paid cash dividends of $61,000.