Joyner Company$$s income statement for Year $2$ follows:

Sales $ $915,000$

Cost of goods sold $503,250$

Gross margin $411,750$

Selling and administrative expenses $330,000$

Net operating income $81,750$

Nonoperating items:

Gain on sale of equipment $6,000$

Income before taxes $87,750$

Income taxes $26,325$

Net income $ $61,425$

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

Year $2$ Year $1$

Assets

Cash and cash equivalents $ $45,825$ $ $42,800$

Accounts receivable $199,000132,000$

Inventory $287,000257,000$

Prepaid expenses $8,50017,000$

Total current assets $540,325448,800$

Property, plant, and equipment $504,000386,000$

Less accumulated depreciation $126,000115,800$

Net property, plant, and equipment $378,000270,200$

Loan to Hymans Company $37,0000$

Total assets $ $955,325$ $ $719,000$

Liabilities and Stockholders' Equity

Accounts payable $ $310,000$ $ $252,000$

Accrued liabilities $22,00030,000$

Income taxes payable $40,00038,000$

Total current liabilities $372,000320,000$

Bonds payable $186,00071,000$

Total liabilities $558,000391,000$

Common stock $285,000245,000$

Retained earnings $112,32583,000$

Total stockholders' equity $397,325328,000$

Total liabilities and stockholders' equity $ $955,325$ $ $719,000$

Equipment costing $$40,000$ with accumulated depreciation of $$34,000$ was sold during Year $2$ for $$12,000.$ The company paid a cash dividend during Year $2$ but did not retire any bonds or repurchase any of its own stock.

Required:

For Year $2$:

Determine the net cash provided by $($used in$)$ operating activities using the indirect method.

Prepare a statement of cash flows.

Compute the free cash flow.