Joyner Companys income statement for Year 2 follows:

Sales	$ 715,000
Cost of goods sold	130,000
Gross margin	585,000
Selling and administrative expenses	150,100
Net operating income	434,900
Nonoperating items:
Gain on sale of equipment	9,000
Income before taxes	443,900
Income taxes	177,560
Net income	$ 266,340

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

	Year 2	Year 1
Assets
Cash	$ 242,140	$ 84,900
Accounts receivable	229,000	141,000
Inventory	318,000	270,000
Prepaid expenses	8,500	17,000
Total current assets	797,640	512,900
Property, plant, and equipment	630,000	504,000
Less accumulated depreciation	165,400	131,400
Net property, plant, and equipment	464,600	372,600
Loan to Hymans Company	50,000	0
Total assets	$ 1,312,240	$ 885,500
Liabilities and Stockholders' Equity
Accounts payable	$ 315,000	$ 257,000
Accrued liabilities	43,000	60,000
Income taxes payable	84,400	80,500
Total current liabilities	442,400	397,500
Bonds payable	197,000	117,000
Total liabilities	639,400	514,500
Common stock	346,000	280,000
Retained earnings	326,840	91,000
Total stockholders' equity	672,840	371,000
Total liabilities and stockholders' equity	$ 1,312,240	$ 885,500

Equipment that had cost $31,200 and on which there was accumulated depreciation of $10,300 was sold during Year 2 for $29,900. 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.