Sales $717,000 Cost of goods sold 293,000 Gross margin 424,000 Selling and administrative expenses 151,700 Net operating income 272,300 Nonoperating items: Gain on sale of equipment 10,000 Income before taxes 282,300 Income taxes Net income 84,690 $197,610 ts balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Assets Cash Accounts receivable Inventory $ 128,910 277,000 319,000 Prepaid expenses Total current assets 10,000 Year 1 $ 85,800 115,000 270,000 20,000 734,910 490,800 Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets 626,000 519,000 166,400 130,100 459,600 388,900 50,000 0 $1,244,510 $879,700 Liabilities and Stockholders' Equity Accounts payable $ 314,000 $259,000 Accrued liabilities 42,000 50,000 Income taxes payable Total current liabilities 84,800 80,700 440,800 389,700 Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity 203,000 120,000 643,800 509,700 342,000 275,000 258,710 95,000 600,710 370,000 Total liabilities and stockholders' equity $1,244,510 $879,700