Joyner Companys income statement for Year 2 follows:

Sales	$	718,000
Cost of goods sold		327,000
Gross margin		391,000
Selling and administrative expenses		218,000
Net operating income		173,000
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		182,000
Income taxes		72,800
Net income	$	109,200

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

	Year 2			Year 1
Assets
Cash	$	53,400		$	55,500
Accounts receivable		256,000			135,000
Inventory		319,000			284,000
Prepaid expenses		9,500			19,000
Total current assets		637,900			493,500
Property, plant, and equipment		633,000			512,000
Less accumulated depreciation		165,000			132,000
Net property, plant, and equipment		468,000			380,000
Loan to Hymans Company		43,000			0
Total assets	$	1,148,900		$	873,500
Liabilities and Stockholders' Equity
Accounts payable	$	313,000		$	267,000
Accrued liabilities		44,000			55,000
Income taxes payable		85,500			81,500
Total current liabilities		442,500			403,500
Bonds payable		198,000			105,000
Total liabilities		640,500			508,500
Common stock		340,000			272,000
Retained earnings		168,400			93,000
Total stockholders' equity		508,400			365,000
Total liabilities and stockholders' equity	$	1,148,900		$	873,500

Equipment that had cost $30,500 and on which there was accumulated depreciation of $10,400 was sold during Year 2 for $29,100. 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.

Required 1.

Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.)

Joyner Company
Statement of Cash FlowsIndirect Method (partial)

Required 2

Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.)

Joyner Company
Statement of Cash Flows for Joyner Company
For Year 2
Operating activities:
Investing activities:
Financing activities:
Beginning cash and cash equivalents
Ending cash and cash equivalents

Required 3

Computer the free cash flows for Year 2