Joyner Companys income statement for Year 2 follows:

Sales	$	717,000
Cost of goods sold		293,000
Gross margin		424,000
Selling and administrative expenses		151,700
Net operating income		272,300
Nonoperating items:
Gain on sale of equipment		10,000
Income before taxes		282,300
Income taxes		84,690
Net income	$	197,610

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

	Year 2			Year 1
Assets
Cash	$	128,910		$	85,800
Accounts receivable		277,000			115,000
Inventory		319,000			270,000
Prepaid expenses		10,000			20,000
Total current assets		734,910			490,800
Property, plant, and equipment		626,000			519,000
Less accumulated depreciation		166,400			130,100
Net property, plant, and equipment		459,600			388,900
Loan to Hymans Company		50,000			0
Total assets	$	1,244,510		$	879,700
Liabilities and Stockholders' Equity
Accounts payable	$	314,000		$	259,000
Accrued liabilities		42,000			50,000
Income taxes payable		84,800			80,700
Total current liabilities		440,800			389,700
Bonds payable		203,000			120,000
Total liabilities		643,800			509,700
Common stock		342,000			275,000
Retained earnings		258,710			95,000
Total stockholders' equity		600,710			370,000
Total liabilities and stockholders' equity	$	1,244,510		$	879,700

Equipment that had cost $31,400 and on which there was accumulated depreciation of $10,200 was sold during Year 2 for $31,200. 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.