Joyner Companys income statement for Year 2 follows:

Sales	$ 707,000
Cost of goods sold	143,000
Gross margin	564,000
Selling and administrative expenses	151,900
Net operating income	412,100
Nonoperating items:
Gain on sale of equipment	7,000
Income before taxes	419,100
Income taxes	125,730
Net income	$ 293,370

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

	Year 2	Year 1
Assets
Cash	$ 293,970	$ 106,700
Accounts receivable	220,000	112,000
Inventory	319,000	273,000
Prepaid expenses	9,000	18,000
Total current assets	841,970	509,700
Property, plant, and equipment	622,000	501,000
Less accumulated depreciation	165,700	130,800
Net property, plant, and equipment	456,300	370,200
Loan to Hymans Company	43,000	0
Total assets	$ 1,341,270	$ 879,900
Liabilities and Stockholders' Equity
Accounts payable	$ 312,000	$ 264,000
Accrued liabilities	42,000	60,000
Income taxes payable	85,700	81,900
Total current liabilities	439,700	405,900
Bonds payable	202,000	107,000
Total liabilities	641,700	512,900
Common stock	345,000	273,000
Retained earnings	354,570	94,000
Total stockholders' equity	699,570	367,000
Total liabilities and stockholders' equity	$ 1,341,270	$ 879,900

Equipment that had cost $31,400 and on which there was accumulated depreciation of $11,900 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:

2. Prepare a statement of cash flows for Year 2.

3. Compute the free cash flow for Year 2.