Joyner Companys income statement for Year 2 follows:

Sales	$	719,000
Cost of goods sold		388,000
Gross margin		331,000
Selling and administrative expenses		151,500
Net operating income		179,500
Nonoperating items:
Gain on sale of equipment		5,000
Income before taxes		184,500
Income taxes		73,800
Net income	$	110,700

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

	Year 2			Year 1
Assets
Cash	$	46,900		$	88,700
Accounts receivable		276,000			116,000
Inventory		320,000			280,000
Prepaid expenses		9,000			18,000
Total current assets		651,900			502,700
Property, plant, and equipment		621,000			508,000
Less accumulated depreciation		166,000			131,900
Net property, plant, and equipment		455,000			376,100
Loan to Hymans Company		40,000			0
Total assets	$	1,146,900		$	878,800
Liabilities and Stockholders' Equity
Accounts payable	$	313,000		$	268,000
Accrued liabilities		45,000			60,000
Income taxes payable		86,000			81,800
Total current liabilities		444,000			409,800
Bonds payable		203,000			101,000
Total liabilities		647,000			510,800
Common stock		333,000			278,000
Retained earnings		166,900			90,000
Total stockholders' equity		499,900			368,000
Total liabilities and stockholders' equity	$	1,146,900		$	878,800

Equipment that had cost $30,700 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $25,100. 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:

Using the indirect method, compute the net cash provided by/used in operating activities for Year 2

Prepare a statement of cash flows for Year 2.

Compute the free cash flow for Year 2.

• Required 1
• Required 2
• Required 3

Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.)

Joyner Company
Statement of Cash FlowsIndirect Method (partial)

Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.)

Joyner Company
Statement of Cash Flows
For Year 2
Operating activities:
Investing activities:
Financing activities:
Beginning cash and cash equivalents
Ending cash and cash equivalents

Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.)

Free cash flow