Joyner Company's income statement for Year 2 follows: 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 $ 707,000 123,000 584,000 150,900 433,100 9,000 442,100 176,840 $ 265,260 Its balance sheet amounts at the end of Years 1 and 2 are as follows: