Joyner Companys income statement for Year 2 follows:

Sales $ 716,000

Cost of goods sold 280,000

Gross margin 436,000

Selling and administrative expenses 217,000

Net operating income 219,000

Nonoperating items:

Gain on sale of equipment 10,000

Income before taxes 229,000

Income taxes 68,700

Net income $ 160,300

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

Year 2 Year 1

Assets

Cash and cash equivalents $ 91,700 $ 104,600

Accounts receivable 277,000 113,000

Inventory 318,000 275,000

Prepaid expenses 10,000 20,000

Total current assets 696,700 512,600

Property, plant, and equipment 625,000 506,000

Less accumulated depreciation 166,300 130,600

Net property, plant, and equipment 458,700 375,400

Loan to Hymans Company 48,000 0

Total assets $ 1,203,400 $ 888,000

Liabilities and Stockholders' Equity

Accounts payable $ 312,000 $ 267,000

Accrued liabilities 43,000 51,000

Income taxes payable 85,600 82,000

Total current liabilities 440,600 400,000

Bonds payable 207,000 116,000

Total liabilities 647,600 516,000

Common stock 337,000 282,000

Retained earnings 218,800 90,000

Total stockholders' equity 555,800 372,000

Total liabilities and stockholders' equity $ 1,203,400 $ 888,000

Equipment that had cost $31,200 and on which there was accumulated depreciation of $10,100 was sold during Year 2 for $31,100. 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:

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.

Joyner Company's income statement for Year 2 follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net income $ 716,000 280,000 436,000 217,000 219,000 10,000 229,000 68,700 $ 160,300 Its balance sheet amounts at the end of Years 1 and 2 are as follows Year 2 Year 1 Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation het property, plant, and equipment Loan to Hyttans Company Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders equity $ 91,700 277,800 318,000 10,000 696,700 625,000 166,300 458,700 48,000 $1,203,400 $104,600 113,000 275,000 20,000 512,600 506,000 130,600 375,400 8 $888,000 $312,000 43,000 85,600 440,600 207,000 647,600 337,000 218,800 555,800 $1,203,400 $267.000 51,000 82,090 400,000 116.000 516,000 282,000 90,000 372,000 $888,000 Equipment that had cost $31,200 and on which there was accumulated depreciation of $10,100 was sold during Year 2 for $31100 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