Joyner Companys income statement for Year 2 follows:

Sales	$ 711,000
Cost of goods sold	276,000
Gross margin	435,000
Selling and administrative expenses	150,400
Net operating income	284,600
Nonoperating items:
Gain on sale of equipment	8,000
Income before taxes	292,600
Income taxes	117,040
Net income	$ 175,560

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

	Year 2	Year 1
Assets
Cash	$ 151,860	$ 58,700
Accounts receivable	225,000	150,000
Inventory	319,000	289,000
Prepaid expenses	10,000	20,000
Total current assets	705,860	517,700
Property, plant, and equipment	629,000	502,000
Less accumulated depreciation	166,600	131,500
Net property, plant, and equipment	462,400	370,500
Loan to Hymans Company	48,000	0
Total assets	$ 1,216,260	$ 888,200
Liabilities and Stockholders' Equity
Accounts payable	$ 312,000	$ 268,000
Accrued liabilities	42,000	55,000
Income taxes payable	85,300	81,200
Total current liabilities	439,300	404,200
Bonds payable	198,000	105,000
Total liabilities	637,300	509,200
Common stock	345,000	288,000
Retained earnings	233,960	91,000
Total stockholders' equity	578,960	379,000
Total liabilities and stockholders' equity	$ 1,216,260	$ 888,200

Equipment that had cost $31,600 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $28,500. 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.