Joyner Companys income statement for Year 2 follows:

Sales	$	719,000
Cost of goods sold		100,000
Gross margin		619,000
Selling and administrative expenses		150,600
Net operating income		468,400
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		477,400
Income taxes		143,220
Net income	$	334,180

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

	Year 2			Year 1
Assets
Cash and cash equivalents	$	303,780		$	92,100
Accounts receivable		221,000			116,000
Inventory		319,000			281,000
Prepaid expenses		10,500			21,000
Total current assets		854,280			510,100
Property, plant, and equipment		639,000			516,000
Less accumulated depreciation		167,000			131,400
Net property, plant, and equipment		472,000			384,600
Loan to Hymans Company		50,000			0
Total assets	$	1,376,280		$	894,700
Liabilities and Stockholders' Equity
Accounts payable	$	314,000		$	269,000
Accrued liabilities		46,000			58,000
Income taxes payable		85,100			81,700
Total current liabilities		445,100			408,700
Bonds payable		193,000			109,000
Total liabilities		638,100			517,700
Common stock		341,000			283,000
Retained earnings		397,180			94,000
Total stockholders' equity		738,180			377,000
Total liabilities and stockholders' equity	$	1,376,280		$	894,700

Equipment that had cost $30,700 and on which there was accumulated depreciation of $10,200 was sold during Year 2 for $29,500. 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.