The December 31, 2009, balance sheet of Schism, Inc., showed long-term debt of $

Question

The December 31, 2009, balance sheet of Schism, Inc., showed long-term debt of $1.380 million, $136,000 in the common stock account and $2.61 million in the additional paid-in surplus account. The December 31, 2010, balance sheet showed long-term debt of $1.54 million, $146,000 in the common stock account and $2.91 million in the additional paid-in surplus account. The 2010 income statement showed an interest expense of $92,000 and the company paid out $141,000 in cash dividends during 2010. The firm%u2019s net capital spending for 2010 was $920,000, and the firm reduced its net working capital investment by $121,000.

What was the firm%u2019s operating cash flow during 2010?

Explanation / Answer

net income from operations = 920000 - 121000 - (1.54million - 1.38 million) - (146000-136000) - (2.91 milion - 2.61 million) + 141000 + 92000

= 562000

firm operating cash flow = 562000 + 121000 = 683000

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