Joyner Companys income statement for Year 2 follows:

Joyner Company's income statement for Year 2 follows: Sales Cost of goods sold $ 705,000 131,000 Gross margin Selling and administrative expenses 574,000 217,000 Net operating income Gain on sale of equipment 357,000 7,000 Income before taxes Income taxes 364,000 109,200 Net income $ 254,800