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15 August, 19:04

7. The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $1.87 million, and the 2018 balance sheet showed long-term debt of $2.21 million. The 2018 income statement showed an interest expense of $255,000. What was the firm's cash flow to creditors during 2018?

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  1. 15 August, 19:24
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    The firm's cash flow to creditors during 2018 was - $85,000

    Explanation:

    The firms cash flow to creditors would be calculating by substracting the interest expense of the firm to the long-term debt taken during the period.

    Cash flow to creditors = Interest expense - Net new LTD borrowing

    Cash flow to creditors = Interest expense - (LTDend - LTDbeg)

    Cash flow to creditors = $255,000 - ($2,210,000 - 1,870,000)

    Cash flow to creditors = - $85,000
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Home » Business » 7. The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $1.87 million, and the 2018 balance sheet showed long-term debt of $2.21 million. The 2018 income statement showed an interest expense of $255,000.
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