Joyner Company’s income statement for Year 2 follows:

Sales	$	702,000
Cost of goods sold		304,000
Gross margin		398,000
Selling and administrative expenses		216,000
Net operating income		182,000
Nonoperating items:
Gain on sale of equipment		9,000
Income before taxes		191,000
Income taxes		57,300
Net income	$	133,700

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

	Year 2			Year 1
Assets
Cash	$	91,900		$	57,600
Accounts receivable		272,000			140,000
Inventory		319,000			277,000
Prepaid expenses		8,500			17,000
Total current assets		691,400			491,600
Property, plant, and equipment		624,000			519,000
Less accumulated depreciation		166,400			130,700
Net property, plant, and equipment		457,600			388,300
Loan to Hymans Company		42,000			0
Total assets	$	1,191,000		$	879,900
Liabilities and Stockholders' Equity
Accounts payable	$	319,000		$	260,000
Accrued liabilities		48,000			59,000
Income taxes payable		86,000			81,900
Total current liabilities		453,000			400,900
Bonds payable		192,000			108,000
Total liabilities		645,000			508,900
Common stock		350,000			276,000
Retained earnings		196,000			95,000
Total stockholders' equity		546,000			371,000
Total liabilities and stockholders' equity	$	1,191,000		$	879,900

Equipment that had cost $30,900 and on which there wasaccumulated depreciation of $11,800 was sold during Year 2 for$28,100. The company declared and paid a cash dividend during Year2. It did not retire any bonds or repurchase any of its ownstock.

Required:

1. Using the indirect method, compute the net cash providedby/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.