Joyner Companys income statement for Year 2 follows:

Sales	$	714,000
Cost of goods sold		84,000
Gross margin		630,000
Selling and administrative expenses		217,000
Net operating income		413,000
Nonoperating items:
Gain on sale of equipment		7,000
Income before taxes		420,000
Income taxes		126,000
Net income	$	294,000

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

	Year 2			Year 1
Assets
Cash and cash equivalents	$	234,000		$	69,900
Accounts receivable		250,000			114,000
Inventory		319,000			287,000
Prepaid expenses		11,000			22,000
Total current assets		814,000			492,900
Property, plant, and equipment		635,000			504,000
Less accumulated depreciation		165,300			130,600
Net property, plant, and equipment		469,700			373,400
Loan to Hymans Company		47,000			0
Total assets	$	1,330,700		$	866,300
Liabilities and Stockholders' Equity
Accounts payable	$	313,000		$	257,000
Accrued liabilities		43,000			52,000
Income taxes payable		85,100			81,300
Total current liabilities		441,100			390,300
Bonds payable		206,000			109,000
Total liabilities		647,100			499,300
Common stock		331,000			274,000
Retained earnings		352,600			93,000
Total stockholders' equity		683,600			367,000
Total liabilities and stockholders' equity	$	1,330,700		$	866,300

Equipment that had cost $30,000 and on which there was accumulated depreciation of $10,700 was sold during Year 2 for $26,300. 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.

Complete this question by entering your answers in the tabs below.

• 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)
		0
		$0

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

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:
		0
Financing activities:
		0
		0
Beginning cash and cash equivalents
Ending cash and cash equivalents		$0

• Required 1
• Required 3

• Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

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

  Free cash flow

• Required 2
• Required 3