Joyner Companys income statement for Year 2 follows:

Sales	$	711,000
Cost of goods sold		235,000
Gross margin		476,000
Selling and administrative expenses		151,000
Net operating income		325,000
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		334,000
Income taxes		133,600
Net income	$	200,400

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

	Year 2			Year 1
Assets
Cash	$	174,000		$	107,100
Accounts receivable		257,000			126,000
Inventory		319,000			280,000
Prepaid expenses		10,500			21,000
Total current assets		760,500			534,100
Property, plant, and equipment		627,000			501,000
Less accumulated depreciation		165,200			130,500
Net property, plant, and equipment		461,800			370,500
Loan to Hymans Company		42,000			0
Total assets	$	1,264,300		$	904,600
Liabilities and Stockholders' Equity
Accounts payable	$	315,000		$	267,000
Accrued liabilities		49,000			60,000
Income taxes payable		84,300			81,600
Total current liabilities		448,300			408,600
Bonds payable		202,000			116,000
Total liabilities		650,300			524,600
Common stock		350,000			283,000
Retained earnings		264,000			97,000
Total stockholders' equity		614,000			380,000
Total liabilities and stockholders' equity	$	1,264,300		$	904,600

Equipment that had cost $30,400 and on which there was accumulated depreciation of $10,700 was sold during Year 2 for $28,700. 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.