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

Question

2. The December 31, 2009, balance sheet of Schism, Inc., showed long-term debt of $1.395 million, and the December 31, 2010, balance sheet showed long-term debt of $1.57 million. The 2010 income statement showed an interest expense of $93,500.

What was the firm's cash flow to creditors during 2010? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567))

3.Problem 2-12 Cash Flow to Stockholders [LO 4]

The December 31, 2009, balance sheet of Schism, Inc., showed $147,000 in the common stock account and $2.72 million in the additional paid-in surplus account. The December 31, 2010, balance sheet showed $157,000 and $3.02 million in the same two accounts, respectively. The company paid out $152,000 in cash dividends during 2010.

What was the cash flow to stockholders for the year? (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567))

1. Hammett, Inc., has sales of $19,610, costs of $9,420, depreciation expense of $2,090, and interest expense of $1,580. Assume the tax rate is 30 percent.

Explanation / Answer

1)

cash flow, = .7*(19610-9420-2090-1580)+2090 = 6654

2)

cash inflow = 1.57-1.395 = .175 million = .175*1000000 = 175000

cash outflow = 93500

net cash inflow = 175000-93500 = 81500

3)

initially, total stocks = 147000+2720000 = 28967000

final total stockks = 157000+3020000 = 3177000

net cash inflow = 310000

again cash outflow for dividend = 152000

net cash inflow = 310000-152000 = 158000

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