Question

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,460,000, $152,000 in the common stock account, and $2,770,000 in the additional paid-in surplus account. The December 31, 2016, balance sheet showed long-term debt of $1,700,000, $162,000 in the common stock account, and $3,070,000 in the additional paid-in surplus account. The 2016 income statement showed an interest expense of $100,000 and the company paid out $157,000 in cash dividends during 2016. The firm’s net capital spending for 2016 was $1,080,000, and the firm reduced its net working capital investment by $137,000. What was the firm's 2016 operating cash flow, or OCF? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
1. What was the cash flow to creditors during 2014? Cash flow to creditors:
2. What was the firm’s cash flow to stockholders during 2014? Cash flow to stockholders $
3. What was the firm’s cash flow from assets during 2014? Cash flow from assets $
4. What was the firm’s operating cash flow during 2014? Operating cash flow $

Answer 1

Answer:

Follows are the solution to this question:

Explanation:

Formula:

$\text{Asset cash flow = creditors cash flow + equity cash flow}\\\\ \text{creditors cash flow = payment of interest-net new loans}\\\\ \text{Cash flow to lenders = interest charged}-( LTD_{end}-LTD_{beg})$

$\text{Cash flow} =100000 -(1700000- 1460000) = - \ 140,000$

$\text{Shareholder cash flow = paid dividends-net new shares} \\\\\text{Cash flow = interest paid - (Common} + APIS_{end})- \text{(Common +} APIS_{beg}))$

$\text{Cash flow to the inventory holders}= 157000 -(162000 +3070000))-(152000+2770000) = - \ 5997000$

$\text{Asset cash flow = - \ 6,137,000}$