Joyner Companys income statement for Year 2 follows:

Sales	$ 703,000
Cost of goods sold	280,000
Gross margin	423,000
Selling and administrative expenses	150,100
Net operating income	272,900
Nonoperating items:
Gain on sale of equipment	7,000
Income before taxes	279,900
Income taxes	83,970
Net income	$ 195,930

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

	Year 2	Year 1
Assets
Cash	$ 183,830	$ 40,900
Accounts receivable	228,000	139,000
Inventory	319,000	289,000
Prepaid expenses	9,500	19,000
Total current assets	740,330	487,900
Property, plant, and equipment	629,000	519,000
Less accumulated depreciation	166,700	130,900
Net property, plant, and equipment	462,300	388,100
Loan to Hymans Company	45,000	0
Total assets	$ 1,247,630	$ 876,000
Liabilities and Stockholders' Equity
Accounts payable	$ 316,000	$ 265,000
Accrued liabilities	45,000	59,000
Income taxes payable	85,700	81,000
Total current liabilities	446,700	405,000
Bonds payable	201,000	106,000
Total liabilities	647,700	511,000
Common stock	345,000	271,000
Retained earnings	254,930	94,000
Total stockholders' equity	599,930	365,000
Total liabilities and stockholders' equity	$ 1,247,630	$ 876,000

Equipment that had cost $31,100 and on which there was accumulated depreciation of $10,900 was sold during Year 2 for $27,200. 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.