Joyner Company's income statement for Year 2 follows: $ 713,000 Cost of goods sold 398,000 Gross margin 315,000 Selling and administrative expenses 151,700 Net operating income 163,300 Nonoperating items: Gain on sale of equipment Income before taxes Sales Income taxes Net income $ 103,380 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Loan to Hymans Company Income taxes payable Total current liabilities 9,000 Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Bonds payable Total liabilities 172,300 68,920 Common stock Retained earnings $ 94,480 224,000 318,000 10,500 646,980 624,000 167,000 457,000 47,000 $1,150,980 $ 313,000 47,000 84,600 444,600 205,000 649,600 $ 79,000 167,380 135,000 280,000 21,000 515,000 504,000 131,500 372,500 0 $ 887,500 $ 267,000 56,000 80,500 403,500 114,000 517,500 334,000 275,000 95,000 Total stockholders' equity 501,380 Total liabilities and stockholders' equity $1,150,980 $887,500 Equipment that had cost $31,700 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $29,600. 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. 370,000

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