Joyner Companys income statement for Year 2 follows:

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

Equipment that had cost $31,900 and on which there was accumulated depreciation of $10,100 was sold during Year 2 for $26,800. 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.

$ 707,000 227,000 480,000 150,400 329,600 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 5,000 334,600 100,380 $ 234, 220 Year 2 Year 1 $ 228,520 225,000 319,000 8,500 781,020 627,000 166,400 460,600 45,000 $1,286,620 $ 74,700 126,000 282,000 17,000 499,700 512,000 130,300 381,700 0 $881,400 Assets Cash 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 $ 312,000 47,000 84,600 443,600 205,000 648,600 347,000 291,020 638,020 $1,286,620 $261,000 60,000 80,400 401,400 115,000 516,400 274,000 91,000 365,000 $881,400 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.) $ 105,000 X Joyner Company Statement of Cash FlowsIndirect Method (partial) Net income Adjustments to convert net income to a cash basis: Decrease in prepaid expenses $ 8,500 Decrease in accounts payable 60,000 X Decrease in accrued liabilities (13,000) Depreciation 44,300 X Gain on sale of equipment (6,000) Increase in accounts receivable (117,000) Increase in inventory (30,000) Increase in income taxes payable 4,000 X (49,200) $ 55,800 Net cash provided by operating activities 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: Net cash provided by operating activities Investing activities: Proceeds from sale of equipment $ Loan to Hymans Company Additions to property, plant, and equipment o $ 56,800 x 26,700 X (43,000) X (159,500) X (175,800) Financing activities: Issuance of bonds payable Issuance of common stock Cash dividends paid 103,000 X 54,000 X (34,600) X Net cash provided by financing activities Net increase in cash Beginning cash and cash equivalents Ending cash and cash equivalents 122,400 3,400 48,100 X 51,500 $ questi DY answers in below. 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 $ 119,000 X