Real-World Case Classifying cash flow activities at five companies
The following cash transactions occurred in five real-world companies:
1. Cisco Systems issued $4 billion in bonds payable in February 2009. Bonds payable are a form ^mir of long-term borrowings.
2. Sears, Reebuck and Company had cash sales of $46.8 billion during its fiscal year ending on January 31,2009.
3. Google, Inc., paid $545.7 million in September 2007 to acquire Postini, Inc.
4. Ford Motor Company completed the sale of several businesses it owned, including a plant that manufactured automotive rails. The sales occurred in 2007 and generated $1.2 billion in cash.
5. In February 2009, Intel Corporation announced it planned to spend $7 billion in 2009 and 2010 to add manufacturing capacity and upgrade some of it’s plants. Assume the cash payments occurred as planned.
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.
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