Joyner Companys income statement for Year 2 follows:

Sales	$	719,000
Cost of goods sold		121,000
Gross margin		598,000
Selling and administrative expenses		151,000
Net operating income		447,000
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		456,000
Income taxes		136,800
Net income	$	319,200

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

	Year 2			Year 1
Assets
Cash	$	304,900		$	56,200
Accounts receivable		220,000			143,000
Inventory		319,000			271,000
Prepaid expenses		10,500			21,000
Total current assets		854,400			491,200
Property, plant, and equipment		637,000			512,000
Less accumulated depreciation		165,700			130,400
Net property, plant, and equipment		471,300			381,600
Loan to Hymans Company		46,000			0
Total assets	$	1,371,700		$	872,800
Liabilities and Stockholders' Equity
Accounts payable	$	319,000		$	252,000
Accrued liabilities		50,000			56,000
Income taxes payable		85,600			81,800
Total current liabilities		454,600			389,800
Bonds payable		199,000			104,000
Total liabilities		653,600			493,800
Common stock		339,000			288,000
Retained earnings		379,100			91,000
Total stockholders' equity		718,100			379,000
Total liabilities and stockholders' equity	$	1,371,700		$	872,800

Equipment that had cost $30,300 and on which there was accumulated depreciation of $10,800 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.