I posed this question earlier and the previous answer was wrong The 2014 balance
ID: 2649824 • Letter: I
Question
I posed this question earlier and the previous answer was wrong
The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.1 million. The 2015 income statement showed an interest expense of $200,000. During 2015, the company had a cash flow to creditors of $0 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm
I posed this question earlier and the previous answer was wrong
The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.1 million. The 2015 income statement showed an interest expense of $200,000. During 2015, the company had a cash flow to creditors of $0 and the cash flow to stockholders for the year was $80,000. Suppose you also know that the firm
Explanation / Answer
Answer:
Cash Flow from assest= cash flow to creditors+ cash flow to stockholders
=$0+$80000
=$80000
Cash flow from assest=Operating cash flow (OCF)-Net capital spending - change in net working capital
$80000=-OCF - $1440000-$83000
$80000=OCF - $1357000
OCF =$1437000