Joyner Companys income statement for Year 2 follows:

Sales	$	717,000
Cost of goods sold		213,000
Gross margin		504,000
Selling and administrative expenses		150,500
Net operating income		353,500
Nonoperating items:
Gain on sale of equipment		7,000
Income before taxes		360,500
Income taxes		144,200
Net income	$	216,300

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

	Year 2			Year 1
Assets
Cash and cash equivalents	$	235,500		$	74,300
Accounts receivable		222,000			113,000
Inventory		319,000			280,000
Prepaid expenses		8,500			17,000
Total current assets		785,000			484,300
Property, plant, and equipment		623,000			507,000
Less accumulated depreciation		166,700			130,400
Net property, plant, and equipment		456,300			376,600
Loan to Hymans Company		45,000			0
Total assets	$	1,286,300		$	860,900
Liabilities and Stockholders' Equity
Accounts payable	$	319,000		$	250,000
Accrued liabilities		47,000			53,000
Income taxes payable		84,000			81,900
Total current liabilities		450,000			384,900
Bonds payable		206,000			105,000
Total liabilities		656,000			489,900
Common stock		346,000			273,000
Retained earnings		284,300			98,000
Total stockholders' equity		630,300			371,000
Total liabilities and stockholders' equity	$	1,286,300		$	860,900

Equipment that had cost $31,700 and on which there was accumulated depreciation of $10,100 was sold during Year 2 for $28,600. 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.