Joyner Companys income statement for Year 2 follows:

Sales	$	719,000
Cost of goods sold		260,000
Gross margin		459,000
Selling and administrative expenses		150,400
Net operating income		308,600
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		317,600
Income taxes		127,040
Net income	$	190,560

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

	Year 2			Year 1
Assets
Cash	$	139,560		$	66,000
Accounts receivable		261,000			142,000
Inventory		320,000			271,000
Prepaid expenses		8,500			17,000
Total current assets		729,060			496,000
Property, plant, and equipment		631,000			518,000
Less accumulated depreciation		165,700			130,500
Net property, plant, and equipment		465,300			387,500
Loan to Hymans Company		43,000			0
Total assets	$	1,237,360		$	883,500
Liabilities and Stockholders' Equity
Accounts payable	$	310,000		$	256,000
Accrued liabilities		45,000			56,000
Income taxes payable		84,700			80,500
Total current liabilities		439,700			392,500
Bonds payable		202,000			109,000
Total liabilities		641,700			501,500
Common stock		345,000			289,000
Retained earnings		250,660			93,000
Total stockholders' equity		595,660			382,000
Total liabilities and stockholders' equity	$	1,237,360		$	883,500

Equipment that had cost $30,100 and on which there was accumulated depreciation of $10,200 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.