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Joyner Companys income statement for Year 2 follows: Sales $ 701,000 Cost of goods sold 342,000 Gross margin 359,000 Selling and administrative expenses 217,000 Net operating income 142,000 Nonoperating items: Gain on sale of equipment 7,000 Income before taxes 149,000 Income taxes 44,700 Net income $ 104,300 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash $ 50,600 $ 62,900 Accounts receivable 258,000 149,000 Inventory 319,000 285,000 Prepaid expenses 10,000 20,000 Total current assets 637,600 516,900 Property, plant, and equipment 633,000 511,000 Less accumulated depreciation 166,500 132,000 Net property, plant, and equipment 466,500 379,000 Loan to Hymans Company 40,000 0 Total assets $ 1,144,100 $ 895,900 Liabilities and Stockholders' Equity Accounts payable $ 317,000 $ 267,000 Accrued liabilities 42,000 54,000 Income taxes payable 84,300 81,900 Total current liabilities 443,300 402,900 Bonds payable 193,000 115,000 Total liabilities 636,300 517,900 Common stock 344,000 288,000 Retained earnings 163,800 90,000 Total stockholders' equity 507,800 378,000 Total liabilities and stockholders' equity $ 1,144,100 $ 895,900 Equipment that had cost $31,300 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $27,200. 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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