The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,460,000, and the December 31, 2016, balance sheet showed long-term debt of $1,700,000. The 2016 income statement showed an interest expense of $100,000. What was the firm's cash flow to creditors during 2016? (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.)

Question

Natalee Williams

Business

24 January, 21:51

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,460,000, and the December 31, 2016, balance sheet showed long-term debt of $1,700,000. The 2016 income statement showed an interest expense of $100,000. What was the firm's cash flow to creditors during 2016? (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.)

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Answers (1)

Know the Answer?

Terrell Bradley · Answer 1

- $140,000

Explanation:

The Cash flow to creditors = Interest paid - Net new borrowing

= Interest paid - (Ending Long term debt - Beginning Long term debt)

= $100,000 - ($1,700,000 - $1,460,000)

= $100,000 - $240,000

= - $140,000

Therefore, the cash flow to creditors is - $140,000.