Problem $13-10($Algo$)$ Prepare a Statement of Cash Flows; Free Cash Flow $[$LO$13-1,$ LO$13-2,$ LO$13-3]$

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 $8,000$

Income before taxes $89,750$

Income taxes $26,925$

Net income $ $62,825$

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

Year $2$ Year $1$

Assets

Cash $ $-21,675$ $ $-1,400$

Accounts receivable $247,000169,000$

Inventory $309,000257,000$

Prepaid expenses $6,50013,000$

Total current assets $540,825437,600$

Property, plant, and equipment $514,000392,000$

Less accumulated depreciation $128,500117,600$

Net property, plant, and equipment $385,500274,400$

Loan to Hymans Company $36,0000$

Total assets $ $962,325$ $ $712,000$

Liabilities and Stockholders' Equity

Accounts payable $ $308,000$ $ $247,000$

Accrued liabilities $21,00026,000$

Income taxes payable $44,00041,000$

Total current liabilities $373,000314,000$

Bonds payable $197,00072,000$

Total liabilities $570,000386,000$

Common stock $280,000245,000$

Retained earnings $112,32581,000$

Total stockholders' equity $392,325326,000$

Total liabilities and stockholders' equity $ $962,325$ $ $712,000$

Equipment that had cost $$36,000$ and on which there was accumulated depreciation of $$27,000$ was sold during Year $2$ for $$17,000.$ 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 $2.$