Joyner Companys income statement for Year 2 follows:

Sales	$	715,000
Cost of goods sold		108,000
Gross margin		607,000
Selling and administrative expenses		150,200
Net operating income		456,800
Nonoperating items:
Gain on sale of equipment		7,000
Income before taxes		463,800
Income taxes		139,140
Net income	$	324,660

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

	Year 2			Year 1
Assets
Cash	$	323,860		$	73,600
Accounts receivable		222,000			123,000
Inventory		320,000			281,000
Prepaid expenses		9,000			18,000
Total current assets		874,860			495,600
Property, plant, and equipment		629,000			503,000
Less accumulated depreciation		165,500			131,300
Net property, plant, and equipment		463,500			371,700
Loan to Hymans Company		42,000			0
Total assets	$	1,380,360		$	867,300
Liabilities and Stockholders' Equity
Accounts payable	$	316,000		$	264,000
Accrued liabilities		44,000			50,000
Income taxes payable		85,200			81,300
Total current liabilities		445,200			395,300
Bonds payable		208,000			103,000
Total liabilities		653,200			498,300
Common stock		341,000			273,000
Retained earnings		386,160			96,000
Total stockholders' equity		727,160			369,000
Total liabilities and stockholders' equity	$	1,380,360		$	867,300

Equipment that had cost $30,700 and on which there was accumulated depreciation of $10,900 was sold during Year 2 for $26,800. 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.