Problem 12-10A Prepare a Statement of Cash Flows; Free Cash Flow [LO12-1, LO12-2, LO12-3] Joyner Companys income statement for Year 2 follows: Sales $ 708,000 Cost of goods sold 381,000 Gross margin 327,000 Selling and administrative expenses 217,000 Net operating income 110,000 Gain on sale of equipment 9,000 Income before taxes 119,000 Income taxes 35,700 Net income $ 83,300 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash $ 20,400 $ 57,900 Accounts receivable 262,000 131,000 Inventory 319,000 288,000 Prepaid expenses 10,500 21,000 Total current assets 611,900 497,900 Property, plant, and equipment 635,000 519,000 Less accumulated depreciation 165,000 131,600 Net property, plant, and equipment 470,000 387,400 Loan to Hymans Company 43,000 0 Total assets $ 1,124,900 $ 885,300 Liabilities and Stockholders' Equity Accounts payable $ 313,000 $ 258,000 Accrued liabilities 46,000 60,000 Income taxes payable 85,300 81,300 Total current liabilities 444,300 399,300 Bonds payable 203,000 115,000 Total liabilities 647,300 514,300 Common stock 335,000 277,000 Retained earnings 142,600 94,000 Total stockholders' equity 477,600 371,000 Total liabilities and stockholders' equity $ 1,124,900 $ 885,300 Equipment that had cost $31,900 and on which there was accumulated depreciation of $10,900 was sold during Year 2 for $30,000. 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 for operating activities for Year 2. (Negative amount should be indicated by a minus sign.) 2. Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.) 3. Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.)