Joyner Companys income statement for Year 2 follows:

Sales	$ 719,000
Cost of goods sold	184,000
Gross margin	535,000
Selling and administrative expenses	150,900
Net operating income	384,100
Nonoperating items:
Gain on sale of equipment	8,000
Income before taxes	392,100
Income taxes	117,630
Net income	$ 274,470

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

	Year 2	Year 1
Assets
Cash	$ 248,370	$ 46,400
Accounts receivable	228,000	138,000
Inventory	319,000	283,000
Prepaid expenses	9,500	19,000
Total current assets	804,870	486,400
Property, plant, and equipment	627,000	509,000
Less accumulated depreciation	166,500	130,000
Net property, plant, and equipment	460,500	379,000
Loan to Hymans Company	45,000	0
Total assets	$ 1,310,370	$ 865,400
Liabilities and Stockholders' Equity
Accounts payable	$ 312,000	$ 256,000
Accrued liabilities	47,000	60,000
Income taxes payable	85,600	80,400
Total current liabilities	444,600	396,400
Bonds payable	195,000	108,000
Total liabilities	639,600	504,400
Common stock	338,000	270,000
Retained earnings	332,770	91,000
Total stockholders' equity	670,770	361,000
Total liabilities and stockholders' equity	$ 1,310,370	$ 865,400

Equipment that had cost $30,500 and on which there was accumulated depreciation of $10,800 was sold during Year 2 for $27,700. 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.