Please Help; been working on it for days; cannot get the answer: Sheffield Co. s
ID: 2698863 • Letter: P
Question
Please Help; been working on it for days; cannot get the answer:
Sheffield Co. shows the following information on its 2010 income statement: sales = $161,500; costs = $80,200; other expenses = $3,500; depreciation expense = $9,200; interest expense = $6,700; taxes = $21,665; dividends = $8,050. In addition, you're told that the firm issued $4,300 in new equity during 2010, and redeemed $7,300 in outstanding long-term debt
A. What is the cash flow to creditors during 2010?
B. What is the cash flow to stockholders during 2010?
Sheffield Co. shows the following information on its 2010 income statement: sales = $161,500; costs = $80,200; other expenses = $3,500; depreciation expense = $9,200; interest expense = $6,700; taxes = $21,665; dividends = $8,050. In addition, you're told that the firm issued $4,300 in new equity during 2010, and redeemed $7,300 in outstanding long-term debt
A. What is the cash flow to creditors during 2010?
B. What is the cash flow to stockholders during 2010?
Explanation / Answer
A)
Cash flow to creditors = Interest + long term debt = $6700 + $7300 = $14000 (Interest expense and long term debt redemption are the cash flow to creditors)
Cash flow to stockholders = Dividends - New Equity = $8050 - $4300 = $3750