Exercise 13-1 Identify each item as a source or use of cash for each company nam

Question

Exercise 13-1

Identify each item as a source or use of cash for each company named in the exercise.

NBC Universal returns cash to advertisers because of ratings shortfalls.

Use of CashSource of Cash

Deutsche Lufthansa AG purchases 19% of JetBlue Airways stock for $300 million.

Source of CashUse of Cash

Bank of America pays shareholders a dividend of $2.12 per share.

Use of CashSource of Cash

JP Morgan Chase receives dividends on holdings of other companies’ stocks.

Source of CashUse of Cash

Cathay Pacific Airlines pays for new airplanes.

Use of CashSource of Cash

ExxonMobil receives payment from a major customer.

Source of CashUse of Cash

Apple pays its income taxes.

Source of CashUse of Cash

Facebook sells stock in its initial public offering.

Use of CashSource of Cash

Honda Motor Co. makes a payment on its long-term debt.

Explanation / Answer

Answer:-

S.no Particulars Source of Cash use 1 NBC Universal returns cash to advertisers because of ratings shortfalls Opreating activity 2 Deutsche Lufthansa AG purchases 19% of JetBlue Airways stock for $300 million. Investing activity 3 Bank of America pays shareholders a dividend of $2.12 per share. Financing activity 4 JP Morgan Chase receives dividends on holdings of other companies’ stocks. Financing activity 5 Cathay Pacific Airlines pays for new airplanes. Investing activity 6 ExxonMobil receives payment from a major customer. Opreating activity 7 Apple pays its income taxes. Opreating activity 8 Facebook sells stock in its initial public offering. Financing activity 9 Honda Motor Co. makes a payment on its long-term debt. Financing activity

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