Problem 13-10 (Algo) Prepare a Statement of Cash Flows; Free Cash Flow [LO13-1, LO13-2, LO13-3] Joyner Company's Income statement for Year 2 follows Sales Cost of goods sold, Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net income $ 715,000 391,000 324,000 150,500 173,500 6,000 179,500 71,800 $ 107,700 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Year 2 Year 1 $ 90,800 228,000 $ 74,100 319,000 125,000 279,000 10,500 21,000 648,300 499,100 628,000 513,000 166,400 130,800 461,600 382,200 43,000 0 $ 1,152,900 $315,000 43,000 $881,300 $ 263,000 57,000 80,300 84,700 442,700 400,300 203,000 107,000 645,700 507,300 340,000 284,000 167,200 90,000 507,200 374,000 $ 1,152,900 $ 881,300 Equipment that had cost $31,900 and on which there was accumulated depreciation of $10,900 was sold during Year 2 for $27,000. 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: