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Apex Company prepared the statement of cash flows for the current year that is shown below: Apex Company Statement of Cash FlowsIndirect Method Operating activities: Net income $ 40,600 Adjustments to convert net income to cash basis: Depreciation $ 20,200 Increase in accounts receivable (61,100 ) Increase in inventory (25,900 ) Decrease in prepaid expenses 9,800 Increase in accounts payable 54,500 Decrease in accrued liabilities (11,300 ) Increase in income taxes payable 5,000 (8,800 ) Net cash provided by (used in) operating activities 31,800 Investing activities: Proceeds from the sale of equipment 15,800 Loan to Thomas Company (40,700 ) Additions to plant and equipment (120,700 ) Net cash provided by (used in) investing activities (145,600 ) Financing activities: Increase in bonds payable 89,700 Increase in common stock 39,200 Cash dividends (29,800 ) Net cash provided by (used in) financing activities 99,100 Net decrease in cash and cash equivalents (14,700 ) Beginning cash and cash equivalents 27,100 Ending cash and cash equivalents $ 12,400 Required: Compute Apex Companys free cash flow for the current year. (Negative amount should be indicated by a minus sign.)

Required: Compute Apex Companys free cash flow for the current year. (Negative amount should be indicated by a minus sign.)

Joyner Companys income statement for Year 2 follows:

Sales	$	700,000
Cost of goods sold		255,000
Gross margin		445,000
Selling and administrative expenses		216,000
Net operating income		229,000
Nonoperating items:
Gain on sale of equipment		5,000
Income before taxes		234,000
Income taxes		70,200
Net income	$	163,800

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

	Year 2			Year 1
Assets
Cash and cash equivalents	$	124,100		$	75,300
Accounts receivable		262,000			130,000
Inventory		318,000			283,000
Prepaid expenses		11,000			22,000
Total current assets		715,100			510,300
Property, plant, and equipment		631,000			509,000
Less accumulated depreciation		166,300			131,500
Net property, plant, and equipment		464,700			377,500
Loan to Hymans Company		44,000			0
Total assets	$	1,223,800		$	887,800
Liabilities and Stockholders' Equity
Accounts payable	$	318,000		$	267,000
Accrued liabilities		48,000			54,000
Income taxes payable		85,400			80,800
Total current liabilities		451,400			401,800
Bonds payable		196,000			103,000
Total liabilities		647,400			504,800
Common stock		348,000			288,000
Retained earnings		228,400			95,000
Total stockholders' equity		576,400			383,000
Total liabilities and stockholders' equity	$	1,223,800		$	887,800

Equipment that had cost $30,000 and on which there was accumulated depreciation of $11,900 was sold during Year 2 for $23,100. 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.

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