Joyner Companys income statement for Year 2 follows:

Sales	$	703,000
Cost of goods sold		61,000
Gross margin		642,000
Selling and administrative expenses		218,000
Net operating income		424,000
Nonoperating items:
Gain on sale of equipment		7,000
Income before taxes		431,000
Income taxes		172,400
Net income	$	258,600

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

	Year 2			Year 1
Assets
Cash	$	184,200		$	81,500
Accounts receivable		276,000			126,000
Inventory		318,000			284,000
Prepaid expenses		10,500			21,000
Total current assets		788,700			512,500
Property, plant, and equipment		626,000			511,000
Less accumulated depreciation		166,900			130,200
Net property, plant, and equipment		459,100			380,800
Loan to Hymans Company		47,000			0
Total assets	$	1,294,800		$	893,300
Liabilities and Stockholders' Equity
Accounts payable	$	313,000		$	268,000
Accrued liabilities		42,000			60,000
Income taxes payable		85,900			80,300
Total current liabilities		440,900			408,300
Bonds payable		194,000			118,000
Total liabilities		634,900			526,300
Common stock		343,000			276,000
Retained earnings		316,900			91,000
Total stockholders' equity		659,900			367,000
Total liabilities and stockholders' equity	$	1,294,800		$	893,300

Equipment that had cost $31,500 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $27,900. 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.