Joyner Companys income statement for Year 2 follows:

Sales	$	710,000
Cost of goods sold		167,000
Gross margin		543,000
Selling and administrative expenses		150,500
Net operating income		392,500
Nonoperating items:
Gain on sale of equipment		8,000
Income before taxes		400,500
Income taxes		160,200
Net income	$	240,300

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

	Year 2			Year 1
Assets
Cash	$	222,400		$	53,300
Accounts receivable		229,000			142,000
Inventory		320,000			289,000
Prepaid expenses		11,000			22,000
Total current assets		782,400			506,300
Property, plant, and equipment		635,000			509,000
Less accumulated depreciation		165,400			130,400
Net property, plant, and equipment		469,600			378,600
Loan to Hymans Company		49,000			0
Total assets	$	1,301,000		$	884,900
Liabilities and Stockholders' Equity
Accounts payable	$	311,000		$	260,000
Accrued liabilities		43,000			56,000
Income taxes payable		85,800			81,900
Total current liabilities		439,800			397,900
Bonds payable		209,000			105,000
Total liabilities		648,800			502,900
Common stock		347,000			285,000
Retained earnings		305,200			97,000
Total stockholders' equity		652,200			382,000
Total liabilities and stockholders' equity	$	1,301,000		$	884,900

Equipment that had cost $31,500 and on which there was accumulated depreciation of $11,600 was sold during Year 2 for $27,900. 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.