Joyner Company's income statement for Year 2 follows: Sales Cost of goods sold $ 717,000 107,000 Gross margin Selling and administrative expenses 610,000 218,000 Net operating income Gain on sale of equipment 392,000 9,000 Income before taxes Income taxes 401,000 120,300 Net income $ 280,700 Its balance sheet amounts at the end of Years 1 and 2 are as follows