Joyner Companys income statement for Year 2 follows:

Sales: 704,000

Cost of goods sold: 171,000

Gross margin:533,000

Selling and administrative expenses: 218,000

Net operating income:315,000

Nonoperating items

Gain on sale of equipment:10,000

Income before taxes: 325,000

Income taxes: 130,000

Net income: 195,000

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

Year 2			Year 1
Assets
Cash	$	151,000		$	70,200
Accounts receivable		269,000			136,000
Inventory		319,000			280,000
Prepaid expenses		10,500			21,000
Total current assets		749,500			507,200
Property, plant, and equipment		623,000			512,000
Less accumulated depreciation		166,200			130,700
Net property, plant, and equipment		456,800			381,300
Loan to Hymans Company		48,000			0
Total assets	$	1,254,300		$	888,500
Liabilities and Stockholders' Equity
Accounts payable	$	318,000		$	263,000
Accrued liabilities		45,000			59,000
Income taxes payable		84,700			81,500
Total current liabilities		447,700			403,500
Bonds payable		205,000			107,000
Total liabilities		652,700			510,500
Common stock		346,000			285,000
Retained earnings		255,600			93,000
Total stockholders' equity		601,600			378,000
Total liabilities and stockholders' equity	$	1,254,300		$	888,500

Equipment that had cost $30,700 and on which there was accumulated depreciation of $11,800 was sold during Year 2 for $28,900. 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.

Weaver Company Statement of Cash Flows-Indirect Method (partial) Net income 195,000 Adjustments to convert net income to a cash basis: Depreciation Gain on sale of equipment Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Increase in accounts payable Decrease in accrued liabilities Increase in income taxes payable Net cash provided by operating activities 195,000