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	$	719,000
Cost of goods sold		307,000
Gross margin		412,000
Selling and administrative expenses		216,000
Net operating income		196,000
Gain on sale of equipment		9,000
Income before taxes		205,000
Income taxes		61,500
Net income	$	143,500

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

	Year 2		Year 1
Assets
Cash	$	80,800	$	66,200
Accounts receivable		274,000		133,000
Inventory		318,000		290,000
Prepaid expenses		8,500		17,000
Total current assets		681,300		506,200
Property, plant, and equipment		629,000		516,000
Less accumulated depreciation		166,300		130,300
Net property, plant, and equipment		462,700		385,700
Loan to Hymans Company		40,000		0
Total assets	$	1,184,000	$	891,900
Liabilities and Stockholders' Equity
Accounts payable	$	312,000	$	265,000
Accrued liabilities		42,000		52,000
Income taxes payable		85,800		80,900
Total current liabilities		439,800		397,900
Bonds payable		199,000		113,000
Total liabilities		638,800		510,900
Common stock		337,000		285,000
Retained earnings		208,200		96,000
Total stockholders' equity		545,200		381,000
Total liabilities and stockholders' equity	$	1,184,000	$	891,900

Equipment that had cost $30,400 and on which there was accumulated depreciation of $10,000 was sold during Year 2 for $29,400. 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.)