Joyner Companys income statement for Year 2 follows:

Sales	$ 702,000
Cost of goods sold	295,000
Gross margin	407,000
Selling and administrative expenses	152,000
Net operating income	255,000
Nonoperating items:
Gain on sale of equipment	8,000
Income before taxes	263,000
Income taxes	105,200
Net income	$ 157,800

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

	Year 2	Year 1
Assets
Cash	$ 136,400	$ 86,700
Accounts receivable	225,000	113,000
Inventory	319,000	274,000
Prepaid expenses	8,500	17,000
Total current assets	688,900	490,700
Property, plant, and equipment	638,000	520,000
Less accumulated depreciation	165,800	130,600
Net property, plant, and equipment	472,200	389,400
Loan to Hymans Company	49,000	0
Total assets	$ 1,210,100	$ 880,100
Liabilities and Stockholders' Equity
Accounts payable	$ 316,000	$ 252,000
Accrued liabilities	44,000	52,000
Income taxes payable	84,500	81,100
Total current liabilities	444,500	385,100
Bonds payable	198,000	117,000
Total liabilities	642,500	502,100
Common stock	346,000	283,000
Retained earnings	221,600	95,000
Total stockholders' equity	567,600	378,000
Total liabilities and stockholders' equity	$ 1,210,100	$ 880,100

Equipment that had cost $31,000 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $28,400. 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.