Foxboro Companys income statement for Year 2 follows:

Foxboro Company Income Statement
Sales	$	713,000
Cost of goods sold		196,000
Gross margin		517,000
Selling and administrative expenses		217,000
Net operating income		300,000
Gain on sale of equipment		7,000
Income before taxes		307,000
Income taxes		92,100
Net income	$	214,900

Its balance sheet amounts at the end of Years 1 and 2 are as follows:

Foxboro Company Balance Sheet
	Year 2		Year 1
Assets
Cash	$	138,200	$	84,200
Accounts receivable		276,000		120,000
Inventory		319,000		281,000
Prepaid expenses		8,500		17,000
Total current assets		741,700		502,200
Plant and equipment		635,000		502,000
Accumulated depreciation		165,900		131,100
Net plant and equipment		469,100		370,900
Loan to Harker Company		41,000		0
Total assets	$	1,251,800	$	873,100
Liabilities and Stockholders' equity
Accounts payable	$	317,000	$	257,000
Accrued liabilities		43,000		53,000
Income taxes payable		85,500		80,100
Total current liabilities		445,500		390,100
Bonds payable		191,000		117,000
Total liabilities		636,500		507,100
Common stock		338,000		273,000
Retained earnings		277,300		93,000
Total stockholders' equity		615,300		366,000
Total liabilities and stockholders' equity	$	1,251,800	$	873,100

Equipment that had cost $30,600 and on which there was accumulated depreciation of $10,300 was sold during Year 2 for $27,300. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.

Required:
1.	Using the indirect method, compute the net cash for operating activities for Year 2. (Negative amount should be indicated by a minus sign.)

Net cash (Click to select)used inprovided by operating activities

$

2.	Prepare a statement of cash flows for Year 2. (Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Foxboro Company Statement of Cash Flows Year ending last day of Year 2
Operating activities:
(Click to select)Net lossNet income		$
Adjustments to convert net income to cash basis:
(Click to select)Increase in income taxes payableDecrease in accrued liabilitiesIncrease in inventoryIncrease in accounts payableDepreciationDecrease in prepaid expensesGain on sale of equipmentDecrease in accounts payableIncrease in accounts receivableDecrease in accounts receivable	$
(Click to select)Decrease in prepaid expensesDecrease in accounts receivableGain on sale of equipmentDecrease in accounts payableDepreciationIncrease in accounts receivableIncrease in accounts payableDecrease in accrued liabilitiesIncrease in inventoryIncrease in income taxes payable
(Click to select)Increase in accounts payableDepreciationDecrease in accrued liabilitiesDecrease in accounts payableDecrease in prepaid expensesIncrease in income taxes payableGain on sale of equipmentIncrease in accounts receivableIncrease in inventoryDecrease in accounts receivable
(Click to select)Decrease in accounts payableIncrease in accounts receivableDecrease in accrued liabilitiesDecrease in accounts receivableDepreciationDecrease in prepaid expensesIncrease in inventoryIncrease in income taxes payableIncrease in accounts payableGain on sale of equipment
(Click to select)Increase in accounts receivableDecrease in accounts payableDepreciationGain on sale of equipmentDecrease in prepaid expensesIncrease in inventoryDecrease in accrued liabilitiesDecrease in accounts receivableIncrease in income taxes payableIncrease in accounts payable
(Click to select)Decrease in prepaid expensesDecrease in accounts payableDecrease in accrued liabilitiesIncrease in accounts payableIncrease in inventoryGain on sale of equipmentDecrease in accounts receivableIncrease in accounts receivableIncrease in income taxes payableDepreciation
(Click to select)Increase in inventoryDepreciationGain on sale of equipmentIncrease in accounts receivableDecrease in accounts receivableDecrease in prepaid expensesIncrease in accounts payableDecrease in accounts payableDecrease in accrued liabilitiesIncrease in income taxes payable
(Click to select)Decrease in prepaid expensesIncrease in inventoryIncrease in accounts receivableDecrease in accounts payableIncrease in accounts payableDecrease in accrued liabilitiesGain on sale of equipmentDepreciationIncrease in income taxes payableDecrease in accounts receivable
Net cash (Click to select)used inprovided by operating activities
Investing activities:
(Click to select)Increase in plant and equipmentLoan to Harker CompanyIncrease in inventoryDecrease in accounts receivableIssuance of bonds payableIncrease in accounts receivableDepreciationDecrease in plant and equipmentCash dividendsDecrease in prepaid expensesProceeds from sale of equipment
(Click to select)Cash dividendsDepreciationProceeds from sale of equipmentIncrease in inventoryIssuance of bonds payableIncrease in plant and equipmentLoan to Harker CompanyDecrease in prepaid expensesIncrease in accounts receivableDecrease in accounts receivableDecrease in plant and equipment
(Click to select)Issuance of bonds payableLoan to Harker CompanyIncrease in plant and equipmentCash dividendsDecrease in accounts receivableProceeds from sale of equipmentDepreciationDecrease in plant and equipmentDecrease in prepaid expensesIncrease in accounts receivableIncrease in inventory
Net cash (Click to select)used inprovided by investing activities
Financing activities:
(Click to select)Gain on sale of equipmentIssuance of common stockIssuance of bonds payableIncrease in inventoryCash dividendsIncrease in prepaid expensesProceeds from sale of equipmentDecrease in prepaid expensesDecrease in accounts receivableLoan to Harker CompanyDecrease in inventory
(Click to select)Decrease in inventoryIncrease in inventoryIncrease in prepaid expensesDecrease in accounts receivableDecrease in prepaid expensesIssuance of common stockIssuance of bonds payableCash dividendsGain on sale of equipmentProceeds from sale of equipmentLoan to Harker Company
(Click to select)Issuance of bonds payableIncrease in inventoryLoan to Harker CompanyDecrease in accounts receivableDecrease in prepaid expensesProceeds from sale of equipmentIssuance of common stockIncrease in prepaid expensesGain on sale of equipmentCash dividendsDecrease in inventory
Net cash (Click to select)provided byused in financing activities
(Click to select)Net increase in cashNet decrease in cash
Cash balance, beginning of year
Cash balance, end of year		$

3.	Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.)

Free cash flow

$