The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt o
ID: 2796437 • Letter: T
Question
The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.3 million. The 2015 income statement showed an interest expense of $155,000.
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.)
The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.3 million. The 2015 income statement showed an interest expense of $155,000.
The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $5.9 million, and the 2015 balance sheet showed long-term debt of $6.3 million. The 2015 income statement showed an interest expense of $155,000. 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.) Cash flow to creditorsExplanation / Answer
Cash flow to creditor = interest paid - Net new borrowing
=interest paid -( Long term debt @ end - Long term debt @ beginning)
= $155000 - (6,300,000 - 5,900,000)
= - $245,000
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