Suppose the following data are derived from the 2014 financial statements of Southwest Airlines. (All dollars are in millions.) Southwest has a December 31 year-end.

Question

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Suppose the following data are derived from the 2014 financial statements of Southwest Airlines. (All dollars are in millions.) Southwest has a December 31 year-end.

Cash balance, January 1, 2014.......... $1,390

Cash paid for repayment of debt......... 122

Cash received from issuance of common stock.... 144

Cash received from issuance of long-term debt.... 500

Cash received from customers............ 9,823

Cash paid for property and equipment......... 1,529

Cash paid for dividends............. 14

Cash paid for repurchase of common stock....... 1,001

Cash paid for goods and services................. 6,978

Instructions

(a) After analyzing the data, prepare a statement of cash flows for Southwest Airlines for the year ended December 31, 2014.

(b) Discuss whether the company’s net cash provided by operating activities was sufficient to finance its investing activities. If it was not, how did the company finance its investing activities?