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Joyner Company’s income statement for Year 2 follows: Sales $ 702,000 Cost of goods sold 304,000...

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 as follows:

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 was accumulated depreciation of $11,800 was sold during Year 2 for $28,100. 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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