Problem 13-10 Prepare a Statement of Cash Flows; Free Cash Flow [LO13-1, LO13-2, LO13-3] Joyner Company's income statement for Year 2 follows: $ 707,000 377,000 330,000 151,000 179,000 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 7,000 186,000 55,800 $ 130,200 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 $ 113,200 225,000 319,000 10,500 667, 700 631,000 166, 600 464, 400 44,000 $1,176, 100 $ 55,500 140,000 281,000 21,000 497,500 507,000 131, 100 375, 900 0 $873,400 Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Le33 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 $ 310,000 49,000 85,900 444,900 203,000 647,900 331,000 197,200 528, 200 $1,176, 100 $251,000 56,000 80,400 387,400 115,000 502,400 272,000 99,000 371,000 $873, 400 Equipment that had cost $31,000 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $27,400. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. Equipment that had cost $31,000 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $27,400. 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 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. Required 1 Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for Year 2. (List any deduction in cash outflows as negative amounts.) Joyner Company Statement of Cash FlowsIndirect Method (partial) Net income Adjustments to convert contribution margin to a cash basis: Depreciation $ (7,000) Gain on sale of equipment Increase in accounts receivable Decrease in inventory Increase in prepaid expenses Increase in accounts payable Increase in income taxes payable (7,000) (7,000) Net cash used in operating activities $ Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a statement of cash flows for Year 2. (List any deduction in cash and cash outflows as negative amounts.) Joyner Company Statement of Cash Flows For Year 2 Operating activities: Investing activities: 0 Financing activities: 0 0 Beginning cash and cash equivalents Ending cash and cash equivalents $ 0 Equipment that had cost $31,000 and on which there was accumulated depreciation of $10,600 was sold during Year 2 for $27,400. 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 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. Required 1 Required 2 Required 3 Compute the free cash flow for Year 2. (Negative amount should be indicated by a minus sign.) Free cash flow