Question
A comparative balance sheet and income statement for Eaton Company follow: Eaton Company Comparative Balance Sheet December 31, 2011 and 2010 2011 2010 Assets Cash
A comparative balance sheet and income statement for Eaton Company follow: Eaton Company Comparative Balance Sheet December 31, 2011 and 2010 2011 2010 Assets Cash $ 42 $ 17 Accounts receivable 309 229 Inventory 156 195 Prepaid expenses 9 5 Total current assets 516 446 Property, plant, and equipment 534 454 Less accumulated depreciation 86 71 Net property, plant, and equipment 448 383 Long-term investments 27 33 Total assets $ 991 $ 862 Liabilities and Stockholders' equity Accounts payable $ 305 $ 225 Accrued liabilities 71 80 Income taxes payable 74 63 Total current liabilities 450 368 Bonds payable 198 172 Total liabilities 648 540 Common stock 207 228 Retained earnings 136 94 Total stockholders equity 343 322 Total liabilities and stockholders' equity $ 991 $ 862 Eaton Company Income Statement For the Year Ended December 31, 2011 Sales $ 752 Cost of goods sold 448 Gross margin 304 Selling and administrative expenses 221 Net operating income 83 Nonoperating items: Gain on sale of investments $ 7 Loss on sale of equipment (2) 5 Income before taxes 88 Income taxes 25 Net income $ 63 During 2011, Eaton sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $6 when purchased several years ago. A cash dividend was paid during 2011 and the company, repurchased $21 of its own stock. Eaton did not retire any bonds during 2011. Required: 1. Using the indirect method, determine the net cash for operating activities for 2011. (Negative amount should be entered with a minus sign.) Net cash operating activities $ 2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2011. (Amounts to be deducted and negative
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