Joyner Companys income statement for Year 2 follows: Sales $ 712,000 Cost of goods sold 259,000 Gross margin 453,000 Selling and administrative expenses 217,000 Net operating income 236,000 Nonoperating items: Gain on sale of equipment 10,000 Income before taxes 246,000 Income taxes 98,400 Net income $ 147,600 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash and cash equivalents $ 127,600 $ 86,000 Accounts receivable 253,000 111,000 Inventory 319,000 281,000 Prepaid expenses 10,500 21,000 Total current assets 710,100 499,000 Property, plant, and equipment 628,000 509,000 Less accumulated depreciation 166,400 130,900 Net property, plant, and equipment 461,600 378,100 Loan to Hymans Company 40,000 0 Total assets $ 1,211,700 $ 877,100 Liabilities and Stockholders' Equity Accounts payable $ 314,000 $ 265,000 Accrued liabilities 48,000 55,000 Income taxes payable 84,500 80,100 Total current liabilities 446,500 400,100 Bonds payable 202,000 109,000 Total liabilities 648,500 509,100 Common stock 350,000 270,000 Retained earnings 213,200 98,000 Total stockholders' equity 563,200 368,000 Total liabilities and stockholders' equity $ 1,211,700 $ 877,100 Equipment that had cost $30,600 and on which there was accumulated depreciation of $11,900 was sold during Year 2 for $28,700.

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. Prepare a statement of cash flows for Year 2. 3. Compute the free cash flow for Year 2.