PROBLEM 14-8 Prepare a Statement of Cash Flows [LO1, LO2] 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... $ 4 $ 11 Accounts receivable 310 230 Inventory.. 160 195 Prepaid expenses. 8 6 Total current assets 482 442 Property, plant, and equipment. 500 420 Less accumulated depreciation 85 70 Net property, plant, and equipment 415 $350 Long-term investments.. 31 38 Total assets..... $928 $830 Liabilities and Stockholders' Equity Accounts payable. $300 $225 Accrued liabilities 70 80 Income taxes payable. 71 63 Total current liabilities 441 368 Bonds payable Total liabilities. 195. 170 636 538 Common stock 160 200 Retained earnings. 132 92 Total stockholders' equity. 292 292 Total liabilities and stockholders' equity. $928 $830 Eaton Company Income Statement For the Year Ended December 31, 2011 Sales.... Cost of goods sold. Gross margin...... Selling and administrative expenses. Net operating income... Nonoperating items: Gain on sale of investments. Loss on sale of equipment. Income before taxes.. Income taxes.... Net income.. $5 (2) $750 450 300 223 77 3 80 24 $ 56 During 2011, Eaton sold some equipment for $18 that had cost $30 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $7 when purchased several years ago. A cash dividend was paid during 2011 and the company, repurchased $40 of its own stock. Eaton did not retire any bonds during 2011. Required: 1. Using the indirect method, determine the net cash provided by operating activities for 2011. 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.