Joyner Company's income statement for Year 2 follows: Joyner Company's Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net income $788,000 417,000 371,000 233,000 138,000 8,000 146,000 58,400 $ 87,600 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Joyner Company's Balance Sheet Year 2 Year 1 $ 31,000 $175,100 259,000 145,000 319,000 288,000 8,500 17,000 617,500 625, 100 580,000 393,000 165,200 130,200 414,800 262,800 94,000 0 $1,126,300 $887,900 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 312,000 270,000 49,000 51,000 85,900 80,900 446,900 401,900 193,000 110,000 639,900 511,900 341,000 285,000 145,400 91,000 486,400 376,000 $1,126,300 $887,900 Equipment that had cost $31,400 and on which there was accumulated depreciation of $12,000 was sold during Year 2 for $27,400. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. Sam Conway, president of the company, considers $35,000 to be the minimum cash balance for operating purposes. As can be seen from the balance sheet data, only $31,000 in cash was available at the end of the current year. The sharp decline is puzzling to Mr. Conway, particularly because sales and profits are at a record high. Required: 1. Using the direct method, adjust the company's 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the direct method, adjust the company's income statement to a cash basis for Year 2. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Joyner Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis: 0 Adjustments to a cash basis: 0 Selling and administrative expenses Adjustments to a cash basis: 0 Income taxes Adjustments to a cash basis: 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the data from (1) above and other data from the problem as needed, prepare a statement of cash flows for Year 2. (Cash outflows and amounts to be deducted should be indicated with a minus sign.) Joyner Company Statement of Cash Flows For Year 2 Operating activities: Cash received from customers Less cash disbursements for: Total cash disbursements 0 0 Investing activities: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0 Required 1 Required 2 >