The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt o
ID: 2718892 • Letter: T
Question
The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $6.1 million, and the 2015 balance sheet showed long-term debt of $6.5 million. The 2015 income statement showed an interest expense of $165,000.
What was the firm’s cash flow to creditors during 2015? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
What was the firm’s cash flow to creditors during 2015? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)
Explanation / Answer
CASH FLOW TO CREDITORS = INTEREST EXPENSE PAID - ADDITIONS IN LONG TERM DEBT FROM 2014 TO 2015
=165000 - (6.5 MILLION -6.1 MILLION)
=165000 - 400000
= - $ 235000
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