Answer:
$1,311,000
Explanation:
The computation of the operating cash flow is shown below:
As we know that
Operating cash flow = Cash flow from assets + capital spending - change in net working capital
where,
Cashflow from Assets = Cashflow to Creditors + Cashflow to Stakeholders
Cashflow to Creditors = Interest paid - Change in long term debt
= $140,000 - ($2,950,000 - $2,700,000)
= -$110,000
Now
Cashflow to Stakeholders
= Dividends paid - New issuance of the equity
= $500,000 - (($500,000 + $3,500,000) - ($460,000 + $3,200,000))
= $160,000
So,
Cashflow from Assets is
= -$110,000 + $160,000
= $50,000
Now
Operating cashflow is
= $50,000 + $1,320,000 + (-$59,000)
= $1,311,000
