Balance sheet accounts for Joyner Company contained the following amounts at the end of Years 1 and 2: Year 2 Year 1 Debit Balance Accounts Cash $347,300 $71,700 Accounts Receivable 230,000 160,000 Inventory 302,000 257,000 Prepaid expenses 5,500 11,000 Loan to Hymas Company 38,000 0 Plant and Equipment 496,000 400,000 Total debits $1,418,800 $899,700 Credit Balance Accounts Accumulated Depreciation $131,900 $121,100 Accounts Payable 560,000 269,000 Accrued Liabilities 18,000 32,000 Bonds Payable 205,000 70,000 Deferred income Taxes 46,500 42,600 Common Stock 319,000 275,000 Retained Earnings 138,400 90,000 Total credits $1,418,800 $899,700 The company's income statement for Year 2 follows: Sales $905,000 Cost of goods sold 511,000 Gross margin 394,000 Selling and administrative expenses 310,000 Net operating income 84,000 Gain on sale of equipment 5,000 Income before taxes 89,000 Income taxes 26,700 Net income $62,300 Equipment that had cost $40,400 and on which there was accumulated depreciation of $28,500 was sold during Year 2 for $16,900. Cash dividends totaling $13,900 were declared and paid during Year 2. rev: 02-21-2011