Joyner Companys income statement for Year 2 follows: Sales $ 716,000 Cost of goods sold 57,000 Gross margin 659,000 Selling and administrative expenses 150,300 Net operating income 508,700 Nonoperating items: Gain on sale of equipment 7,000 Income before taxes 515,700 Income taxes 154,710 Net income $ 360,990 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash $ 346,890 $ 77,900 Accounts receivable 228,000 134,000 Inventory 318,000 273,000 Prepaid expenses 9,000 18,000 Total current assets 901,890 502,900 Property, plant, and equipment 627,000 502,000 Less accumulated depreciation 165,400 130,700 Net property, plant, and equipment 461,600 371,300 Loan to Hymans Company 44,000 0 Total assets $ 1,407,490 $ 874,200 Liabilities and Stockholders' Equity Accounts payable $ 315,000 $ 261,000 Accrued liabilities 45,000 55,000 Income taxes payable 85,000 81,200 Total current liabilities 445,000 397,200 Bonds payable 205,000 101,000 Total liabilities 650,000 498,200 Common stock 335,000 280,000 Retained earnings 422,490 96,000 Total stockholders' equity 757,490 376,000 Total liabilities and stockholders' equity $ 1,407,490 $ 874,200 Equipment that had cost $31,200 and on which there was accumulated depreciation of $10,000 was sold during Year 2 for $28,200. 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.