Joyner Company's income statement for Year 2 follows: $ 713,000 325,000 388,000 151,400 236,600 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 7,000 243,600 97,440 $ 146,160 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 $ 150,660 223,000 320,000 10,500 704,160 629,000 166, 100 462,900 43,000 $1,210,060 $ 74,800 137,000 281,000 21,000 513, 800 502,000 130,300 371,700 $885,500 Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 314,000 48,000 85,300 447,380 208,000 655,300 343,000 211,760 554,760 $1,210,060 $ 252,000 59,000 80,500 391,500 118,000 509,500 278,000 98,000 376,000 $ 885,500 Equipment that had cost $30,000 and on which there was accumulated depreciation of $11,000 was sold during Year 2 for $26,000. 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 provided by/used in operating activities for Year 2. 2. Prepare a statement of cash flows for Year 2. 3. Compute the free cash flow for Year 2. Required 1 Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.) Joyner Company Statement of Cash FlowsIndirect Method (partial) Net income Adjustments to convert net income to a cash basis: Depreciation Gain on sale of equipment Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Increase in accounts payable Decrease in accrued liabilities Decrease in income taxes payable 0 Net cash provided by operating activities Required Required 2 > Required 1 Required 2 Required 3 Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.) Joyner Company Statement of Cash Flows For Year 2 Operating activities: Investing activities: Financing activities 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents S Required 1 Required 2 Required 3 Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.) Free cash flow