Answer:
$650,000
Explanation:
For the computation of operating cash flow first we need to follow some steps which are shown below:-
Step 1
Cash flow of creditors = Interest paid + Long term debt 2015 - Long term debt 2016
= $100,000 + $1,460,000 - $1,700,000
= -$140,000
Step 2
Cash flow to stockholders = Dividend paid + Common stock 2015 + Additional paid in surplus account 2015 - Common stock 2016 - Additional paid in surplus account 2016
= $157,000 + $152,000 + $2,770,000 - $162,000 - $3,070,000
= -$153,000
Step 3
Cash flow from assets = Cash flow of creditors + Cash flow to stockholders
= -$140,000 -$153,000
= -$293,000
and finally
Operating cash flow = Net capital spending + Changes in net working capital - Cash flow from assets
= -$137,000 + $1,080,000 - $293,000
= $650,000
We simply applied the above formulas
