Prepare a Statement of Cash Flows (Indirect Method); Free Cash Flow [LO2, LO3, LO4]Balance sheet acc

Prepare a Statement of Cash Flows (Indirect Method); Free Cash Flow [LO2, LO3, LO4]Balance sheet accounts for Joyner Company contained the following amounts at the end ofYears 1 and 2:BALANCE SHEET ATTACHED AS A FILEThe company’s income statement for Year 2 follows:Sales . . . . . . . . . . . . . . . . . . . $900,000Cost of goods sold . . . . . . . . . 500,000Gross margin . . . . . . . . . . . . . 400,000Selling and administrativeexpenses . . . . . . . . . . . . . . 328,000Net operating income . . . . . . . 72,000Gain on sale of equipment . . . 8,000Income before taxes. . . . . . . . 80,000Income taxes . . . . . . . . . . . . . 24,000Net income . . . . . . . . . . . . . . . $ 56,000Equipment that had cost $40,000 and on which there was accumulated depreciation of$30,000 was sold during Year 2 for $18,000. Cash dividends totaling $15,000 were declared andpaid during Year 2.Required:1. Using the indirect method, compute the net cash provided by operating activities for Year 2.2. Prepare a statement of cash fl ows for Year 2.3. Compute the free cash fl ow for Year 2.4. Briefl y explain why cash declined so sharply during the year.

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