Joyner Companys income statement for Year 2 follows:

Sales	$ 915,000
Cost of goods sold	503,250
Gross margin	411,750
Selling and administrative expenses	326,000
Net operating income	85,750
Nonoperating items:
Gain on sale of equipment	8,000
Income before taxes	93,750
Income taxes	28,125
Net income	$ 65,625

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

	Year 2	Year 1
Assets
Cash	$ -28,925	$ 4,100
Accounts receivable	250,000	165,000
Inventory	306,000	257,000
Prepaid expenses	8,500	17,000
Total current assets	535,575	443,100
Property, plant, and equipment	515,000	407,000
Less accumulated depreciation	128,750	122,100
Net property, plant, and equipment	386,250	284,900
Loan to Hymans Company	43,000	0
Total assets	$ 964,825	$ 728,000
Liabilities and Stockholders' Equity
Accounts payable	$ 306,000	$ 252,000
Accrued liabilities	22,000	28,000
Income taxes payable	41,000	45,000
Total current liabilities	369,000	325,000
Bonds payable	191,000	72,000
Total liabilities	560,000	397,000
Common stock	285,000	245,000
Retained earnings	119,825	86,000
Total stockholders' equity	404,825	331,000
Total liabilities and stockholders' equity	$ 964,825	$ 728,000

Equipment that had cost $38,000 and on which there was accumulated depreciation of $27,000 was sold during Year 2 for $19,000. 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.