Joyner Company's income statement for Year 2 follows:

Sales $701,000

Cost of goods sold 170,000

Gross margin 531,000

Selling and administrative expenses 217,000

Net operating income 314,000

Nonoperating items:

Gain on sale of equipment 7,000

Income before taxes 321,000

Income taxes 128,400

Net income $192,600

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

Year 2 Year 1

Assets

Cash $159,900 $43,000

Accounts receivable 261,000 130,000

Inventory 320,000 286,000

Prepaid expenses 9,000 18,000

Total current assets 749,900 477,000

Property, plant, and equipment 626,000 520,000

Less accumulated depreciation 166,700 130,900

Net property, plant, and equipment 459,300 389,100

Loan to Hymans Company 41,000 0

Total assets $1,250,200 $866,100

Liabilities and Stockholders' Equity

Accounts payable $315,000 $255,000

Accrued liabilities 44,000 52,000

Income taxes payable 84,200 81,100

Total current liabilities 443,200 388,100

Bonds payable 209,000 109,000

Total liabilities 652,200 497,100

Common stock 341,000 273,000

Retained earnings 257,000 96,000

Total stockholders' equity 598,000 369,000

Total liabilities and stockholders' equity$1,250,200 $866,100

Equipment that had cost $30,100 and on which there was accumulated depreciation of $10,400 was sold during Year 2 for $26,700. 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. A statement of cash flows for Year 2.

3. Compute the free cash flow for Year 2.