Question

A comparative balance sheet and income statement for EatonCompany follow:

Eaton Company Comparative Balance Sheet December 31, 2011 and 2010
		2011	2010
Assets
Cash	$	4	$	11
Accountsreceivable		310		230
Inventory		160		195
Prepaidexpenses		8		6
Total currentassets		482		442
Property, plant,and equipment		500		420
Less accumulateddepreciation		85		70
Net property,plant, and equipment		415		350
Long-terminvestments		31		38
Totalassets	$	928	$	830
Liabilities and Stockholders' Equity
Accountspayable	$	300	$	225
Accruedliabilities		70		80
Income taxespayable		71		63
Total currentliabilities		441		368
Bondspayable		195		170
Totalliabilities		636		538
Commonstock		160		200
Retainedearnings		132		92
Totalstockholders’ equity		292		292
Totalliabilities and stockholders' equity	$	928	$	830

Eaton Company Income Statement For the Year Ended December 31, 2011
Sales			$	750
Cost of goodssold				450
Grossmargin				300
Selling andadministrative expenses				223
Net operatingincome				77
Nonoperatingitems:
Gain on sale ofinvestments	$	5
Loss on sale ofequipment		(2)		3
Income beforetaxes				80
Incometaxes				24
Net income			$	56

During 2011, Eaton sold someequipment for $18 that had cost $30 and on which there wasaccumulated depreciation of $10. In addition, the company soldlong-term investments for $12 that had cost $7 when purchasedseveral years ago. A cash dividend was paid during 2011 and thecompany, repurchased $40 of its own stock. Eaton did not retire anybonds during 2011.

Required:
1.	Using the direct method, adjust thecompany’s income statement for 2011 to a cash basis.(Adjustment amounts that are to bededucted should be indicated with a minus sign. Omit the "$" signin your response.)

Eaton Company Direct Method of Determining the Net Cash flows from Operatingactivities
Sales	$
Adjustments to acash basis:
		$
Cost of goodssold
Adjustments to acash basis:
Selling andadministrative expenses
Adjustments to acash basis:
Incometaxes
Adjustments to acash basis:
Net cashoperating activities		$

2.	Using the information obtained in(1) above, along with an analysis of the remaining balance sheetaccounts, prepare a statement of cash flows for 2011.(Cash outflows and amounts to bededucted should be indicated with a minus sign. Omit the "$" signin your response.)

Eaton Company Statement of Cash Flows For the Year Ended December 31, 2011
Operating activities:
Cash receivedfrom customers		$
Less cashdisbursements for:
	$
Total cashdisbursements
Net cashoperating activities
Investingactivities:
Net cashinvesting activities
Financingactivities:
Net cashfinancing activities
Cash balance,beginning
Cash balance,ending		$