The following cash transactions occurred in five real-world companies: 1. In June 2010, Dow Chemical Company sold
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1. In June 2010, Dow Chemical Company sold its Styron subsidiary to Bain Capital Partners for $1.6 billion.
2. General Motors Company issued $16 billion in common stock in November 2010.
3. Consolidated Edison, Inc., paid $8 million of dividends in December 2010.
4. In January 2011, Qualcomm, Inc., announced plans to purchase Atheros Communications, Inc., for $3.2 billion in cash. Assume the deal was completed as announced.
5. Abercrombie & Fitch Co. reported $886 million in cash sales during August, September, and October of 2010.
Required
Determine if each of the above transactions should be classified as an operating, investing, or financing activity. Also, identify the amount of each cash flow and whether it was an inflow or an outflow.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
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