Joyner Companys income statement for Year 2 follows:

1) Using the direct method, adjust the companys income statement to a cash basis for Year 2.

2) Using the data from (1) above and other data from the problem as needed, prepare a statement of cash flows for Year 2.

Joyner Company's Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: $797,000 419,000 378,000 218,000 160,000 Gain on sale of equipment Income before taxes Income taxes Net income 8,000 168,000 67,200 $100,800