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 $ 705,000 330,000 375,000 151,100 223,900 8,000 231,900 92,760 $ 139,140 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Assets Cash Year 2 Year 1 $ 106,840 229,000 $ 67,900 141,000 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 270,000 319,000 8,000 16,000 662,840 494,900 638,000 509,000 166,600 131,100 471,400 377,900 44,000 $ 1,178,240 $ 312,000 47,000 85,200 $ 872,800 $ 251,000 56,000 80,800 444,200 387,800 193,000 105,000 637,200 492,800 340,000 286,000 201,040 94,000 541,040 380,000 $ 1,178,240 $ 872,800 Equipment that had cost $31,600 and on which there was accumulated depreciation of $11,700 was sold during Year 2 for $27,900. 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. Complete this question by entering your answers in the tabs below.