Joyner Companys income statement for Year 2 follows:

Sales	$	704,000
Cost of goods sold		262,000
Gross margin		442,000
Selling and administrative expenses		218,000
Net operating income		224,000
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		233,000
Income taxes		93,200
Net income	$	139,800

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

	Year 2			Year 1
Assets
Cash	$	87,600		$	63,600
Accounts receivable		258,000			142,000
Inventory		319,000			282,000
Prepaid expenses		10,000			20,000
Total current assets		674,600			507,600
Property, plant, and equipment		638,000			506,000
Less accumulated depreciation		166,700			132,000
Net property, plant, and equipment		471,300			374,000
Loan to Hymans Company		50,000			0
Total assets	$	1,195,900		$	881,600
Liabilities and Stockholders' Equity
Accounts payable	$	315,000		$	266,000
Accrued liabilities		43,000			51,000
Income taxes payable		84,500			81,600
Total current liabilities		442,500			398,600
Bonds payable		208,000			105,000
Total liabilities		650,500			503,600
Common stock		345,000			285,000
Retained earnings		200,400			93,000
Total stockholders' equity		545,400			378,000
Total liabilities and stockholders' equity	$	1,195,900		$	881,600

Equipment that had cost $30,900 and on which there was accumulated depreciation of $11,500 was sold during Year 2 for $28,400. 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.