Joyner Companys income statement for Year 2 follows:

Sales	$ 710,000
Cost of goods sold	382,000
Gross margin	328,000
Selling and administrative expenses	151,100
Net operating income	176,900
Nonoperating items:
Gain on sale of equipment	7,000
Income before taxes	183,900
Income taxes	73,560
Net income	$ 110,340

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

	Year 2	Year 1
Assets
Cash	$ 82,140	$ 65,300
Accounts receivable	226,000	112,000
Inventory	318,000	288,000
Prepaid expenses	10,500	21,000
Total current assets	636,640	486,300
Property, plant, and equipment	633,000	510,000
Less accumulated depreciation	166,700	130,600
Net property, plant, and equipment	466,300	379,400
Loan to Hymans Company	49,000	0
Total assets	$ 1,151,940	$ 865,700
Liabilities and Stockholders' Equity
Accounts payable	$ 316,000	$ 254,000
Accrued liabilities	42,000	56,000
Income taxes payable	85,700	81,700
Total current liabilities	443,700	391,700
Bonds payable	205,000	105,000
Total liabilities	648,700	496,700
Common stock	334,000	280,000
Retained earnings	169,240	89,000
Total stockholders' equity	503,240	369,000
Total liabilities and stockholders' equity	$ 1,151,940	$ 865,700

Equipment that had cost $31,900 and on which there was accumulated depreciation of $10,400 was sold during Year 2 for $28,500. 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.

Required 1 Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for Year cash outflows as negative amounts.) Joyner Company Statement of Cash Flows-Indirect Method (partial) Net income $ 110,340 Adjustments to convert net income to a cash basis: Depreciation Gain on sale of equipment Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Increase in accounts payable Decrease in accrued liabilities Increase in income taxes payable Net cash provided by operating activities $ 46,500 (7,000) 39,500 $ 149,840 Required 1 Required 2 Required 3 Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.) Joyner Company Statement of Cash Flows For Year 2 Operating activities: Net cash provided by operating activities Investing activities: Additions to property, plant, and equipment Loan to Hymans Company Proceeds from sale of equipment Net cash used in investing activities 0 Financing activities: Issuance of common stock Cash dividends paid Issuance of bonds payable 0 Net cash provided by financing activities Net increase in cash 0 Beginning cash and cash equivalents Ending cash and cash equivalents 0 $ Required 1 Required 2 Required 3 Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.) Free cash flow