Joyner Companys income statement for Year 2 follows:

Sales	$	717,000
Cost of goods sold		46,000
Gross margin		671,000
Selling and administrative expenses		151,100
Net operating income		519,900
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		528,900
Income taxes		211,560
Net income	$	317,340

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

	Year 2			Year 1
Assets
Cash	$	314,240		$	64,200
Accounts receivable		223,000			128,000
Inventory		318,000			283,000
Prepaid expenses		10,000			20,000
Total current assets		865,240			495,200
Property, plant, and equipment		640,000			520,000
Less accumulated depreciation		166,900			130,700
Net property, plant, and equipment		473,100			389,300
Loan to Hymans Company		46,000			0
Total assets	$	1,384,340		$	884,500
Liabilities and Stockholders' Equity
Accounts payable	$	320,000		$	270,000
Accrued liabilities		47,000			52,000
Income taxes payable		85,600			81,500
Total current liabilities		452,600			403,500
Bonds payable		206,000			113,000
Total liabilities		658,600			516,500
Common stock		349,000			274,000
Retained earnings		376,740			94,000
Total stockholders' equity		725,740			368,000
Total liabilities and stockholders' equity	$	1,384,340		$	884,500

Equipment that had cost $30,800 and on which there was accumulated depreciation of $10,100 was sold during Year 2 for $29,700. 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.