Joyner Companys income statement for Year 2 follows:

Sales	$	719,000
Cost of goods sold		209,000
Gross margin		510,000
Selling and administrative expenses		151,800
Net operating income		358,200
Nonoperating items:
Gain on sale of equipment		6,000
Income before taxes		364,200
Income taxes		145,680
Net income	$	218,520

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

	Year 2			Year 1
Assets
Cash	$	214,820		$	77,400
Accounts receivable		229,000			133,000
Inventory		319,000			275,000
Prepaid expenses		9,000			18,000
Total current assets		771,820			503,400
Property, plant, and equipment		629,000			506,000
Less accumulated depreciation		166,600			130,200
Net property, plant, and equipment		462,400			375,800
Loan to Hymans Company		43,000			0
Total assets	$	1,277,220		$	879,200
Liabilities and Stockholders' Equity
Accounts payable	$	319,000		$	262,000
Accrued liabilities		48,000			56,000
Income taxes payable		84,500			81,200
Total current liabilities		451,500			399,200
Bonds payable		209,000			114,000
Total liabilities		660,500			513,200
Common stock		338,000			272,000
Retained earnings		278,720			94,000
Total stockholders' equity		616,720			366,000
Total liabilities and stockholders' equity	$	1,277,220		$	879,200

Equipment that had cost $30,500 and on which there was accumulated depreciation of $11,800 was sold during Year 2 for $24,700. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.

1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.)

Joyner Company
Statement of Cash FlowsIndirect Method (partial)

2. Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.)

Joyner Company
Statement of Cash Flows
For Year 2
Operating activities:
Investing activities:
Financing activities:
Beginning cash and cash equivalents
Ending cash and cash equivalents

3.

Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.)

Free cash flow