Joyner Companys income statement for Year 2 follows:

Sales	$ 715,000
Cost of goods sold	178,000
Gross margin	537,000
Selling and administrative expenses	150,000
Net operating income	387,000
Nonoperating items:
Gain on sale of equipment	6,000
Income before taxes	393,000
Income taxes	117,900
Net income	$ 275,100

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

	Year 2	Year 1
Assets
Cash	$ 268,900	$ 39,600
Accounts receivable	227,000	149,000
Inventory	319,000	276,000
Prepaid expenses	11,000	22,000
Total current assets	825,900	486,600
Property, plant, and equipment	622,000	510,000
Less accumulated depreciation	166,700	131,100
Net property, plant, and equipment	455,300	378,900
Loan to Hymans Company	45,000	0
Total assets	$ 1,326,200	$ 865,500
Liabilities and Stockholders' Equity
Accounts payable	$ 311,000	$ 254,000
Accrued liabilities	42,000	59,000
Income taxes payable	85,000	80,500
Total current liabilities	438,000	393,500
Bonds payable	207,000	101,000
Total liabilities	645,000	494,500
Common stock	341,000	272,000
Retained earnings	340,200	99,000
Total stockholders' equity	681,200	371,000
Total liabilities and stockholders' equity	$ 1,326,200	$ 865,500

Equipment that had cost $31,900 and on which there was accumulated depreciation of $11,400 was sold during Year 2 for $26,500. 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.