Joyner Companys income statement for Year 2 follows:

Sales $ 703,000 Cost of goods sold 217,000 Gross margin 486,000 Selling and administrative expenses 217,000 Net operating income 269,000 Nonoperating items: Gain on sale of equipment 7,000 Income before taxes 276,000 Income taxes 110,400 Net income $ 165,600

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

Year 2 Year 1 Assets Cash $ 99,100 $ 74,600 Accounts receivable 270,000 123,000 Inventory 319,000 284,000 Prepaid expenses 11,000 22,000 Total current assets 699,100 503,600 Property, plant, and equipment 633,000 504,000 Less accumulated depreciation 167,000 130,700 Net property, plant, and equipment 466,000 373,300 Loan to Hymans Company 43,000 0 Total assets $ 1,208,100 $ 876,900 Liabilities and Stockholders' Equity Accounts payable $ 318,000 $ 253,000 Accrued liabilities 41,000 60,000 Income taxes payable 85,900 80,900 Total current liabilities 444,900 393,900 Bonds payable 201,000 108,000 Total liabilities 645,900 501,900 Common stock 336,000 284,000 Retained earnings 226,200 91,000 Total stockholders' equity 562,200 375,000 Total liabilities and stockholders' equity $ 1,208,100 $ 876,900

Equipment that had cost $31,400 and on which there was accumulated depreciation of $11,400 was sold during Year 2 for $27,000. 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.

1a. Prepare a statement of cash flows for Year

1b.Compute the free cash flow for Year 2.