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Joyner Companys income statement for Year 2 follows:

Sales	$	709,000
Cost of goods sold		317,000
Gross margin		392,000
Selling and administrative expenses		151,200
Net operating income		240,800
Nonoperating items:
Gain on sale of equipment		8,000
Income before taxes		248,800
Income taxes		74,640
Net income	$	174,160

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

	Year 2			Year 1
Assets
Cash and cash equivalents	$	148,060		$	78,100
Accounts receivable		222,000			135,000
Inventory		320,000			271,000
Prepaid expenses		9,000			18,000
Total current assets		699,060			502,100
Property, plant, and equipment		632,000			519,000
Less accumulated depreciation		165,500			131,300
Net property, plant, and equipment		466,500			387,700
Loan to Hymans Company		50,000			0
Total assets	$	1,215,560		$	889,800
Liabilities and Stockholders' Equity
Accounts payable	$	314,000		$	265,000
Accrued liabilities		44,000			57,000
Income taxes payable		84,100			80,800
Total current liabilities		442,100			402,800
Bonds payable		206,000			106,000
Total liabilities		648,100			508,800
Common stock		334,000			290,000
Retained earnings		233,460			91,000
Total stockholders' equity		567,460			381,000
Total liabilities and stockholders' equity	$	1,215,560		$	889,800

Equipment that had cost $31,800 and on which there was accumulated depreciation of $10,800 was sold during Year 2 for $29,000. 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:

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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