Joyner Companys income statement for Year 2 follows:

Sales	$	703,000
Cost of goods sold		251,000
Gross margin		452,000
Selling and administrative expenses		151,800
Net operating income		300,200
Nonoperating items:
Gain on sale of equipment		8,000
Income before taxes		308,200
Income taxes		123,280
Net income	$	184,920

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

	Year 2			Year 1
Assets
Cash	$	122,220		$	81,100
Accounts receivable		257,000			127,000
Inventory		320,000			279,000
Prepaid expenses		8,500			17,000
Total current assets		707,720			504,100
Property, plant, and equipment		630,000			500,000
Less accumulated depreciation		166,700			131,500
Net property, plant, and equipment		463,300			368,500
Loan to Hymans Company		42,000			0
Total assets	$	1,213,020		$	872,600
Liabilities and Stockholders' Equity
Accounts payable	$	312,000		$	253,000
Accrued liabilities		40,000			59,000
Income taxes payable		84,600			80,600
Total current liabilities		436,600			392,600
Bonds payable		197,000			100,000
Total liabilities		633,600			492,600
Common stock		332,000			287,000
Retained earnings		247,420			93,000
Total stockholders' equity		579,420			380,000
Total liabilities and stockholders' equity	$	1,213,020		$	872,600

Equipment that had cost $30,500 and on which there was accumulated depreciation of $10,400 was sold during Year 2 for $28,100. 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.