Problem 15-10 (Algo) Prepare a Statement of Cash Flows; Free Cash Flow [LO15-1, LO15- 2, LO15-3] Joyner Company's income statement for Year 2 follows: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of equipment Income before taxes Income taxes Net income $ 717,000 70,000 647,000 151,500 495,500 9,000 504,500 201,800 $ 302,700 Its balance sheet amounts at the end of Years 1 and 2 are as follows: 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 Total assets Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Year 2 Year 1 $ 279,600 222,000 319,000 $ 75,400 130,000 276,000 17,000 8,500 829,100 498,400 630,000 519,000 165,300 130,600 464,700 388,400 47,000 0 $ 1,340,800 $ 320,000 45,000 $ 886,800 $ 258,000 59,000 81,800 84,000 449,000 398,800 196,000 113,000 645,000 511,800 338,000 285,000 357,800 90,000 695,800 375,000 $ 886,800 Total stockholders' equity Total liabilities and stockholders' equity $ 1,340,800 Equipment that had cost $30,900 and on which there was accumulated depreciation of $12,000 was sold during Year 2 for $27,900. 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.