Answer: $633,500
Explanation:
Cash flow to creditors:
= Interest Paid - (2016, Long term debt - 2015, Long term debt)
= $98,500 - ($1,670,000 - $1,445,000)
= -($126,500)
Cash flow to stockholders:
= Dividend paid - [(2016 common stock account + 2016 additional paid in surplus) - (2015 common stock account + 2015 additional paid in surplus)]
= $154,000 - [($159,000 + $3,040,000) - ($149,000 + $2,740,000)]
= -($156,000)
Therefore,
Cash flow from assets = Cash flow to creditors + Cash flow to stockholders
= -($126,500) + (-$156,000)
= -($282,500)
Hence,
Operating cash flow = Cash flow from assets + Capital spending + Change in working capital
= -($282,500) + $1,050,000 + (-$134,000)
= $633,500
