The December 31, 2013 balance sheet of Schism, Inc., showed long-term debt $1,41

Question

The December 31, 2013 balance sheet of Schism, Inc., showed long-term debt $1,415,000, $143,000 in the common stock account and $2,680,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1,610,000, $153,000 in the common stock account and expense of $95,500 and the company paid out $148,000 in cash dividends during 2014. The firm's net capital spending for 2014 was $990,000, and the firm reduced its net working capital investment by $128.000. What was the firm's operating cash flow during 2014?

Explanation / Answer

Operating Cash Flows = $600,500

Working Note;

Source of funds increased = $4,743,000 - $4,238,000 = $505,000

additional source (Decrease of working capital for 2104)= $128,000

Total source = $633,000

Capital spending in 2014 = $990,000

Less total source = $633,000

Capital spending from other source is = $357,000

Add ; Dividend & Interest ($95,500 + $148,000) =$243,500

Operating cash flows = $600,500

2013 2014 Common stock $143,000 $153,000 Additional paid in surplus $2,680,000 $2,980,000 Long term debt $1,415,000 $1,610,000 Total long term source of funds $4,238,000 $4,743,000

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