The 2010 balance sheet of Maria\'s Tennis Shop, Inc., showed long-term debt of $

Question

The 2010 balance sheet of Maria's Tennis Shop, Inc., showed long-term debt of $5.7 million, and the 2011 balance sheet showed long-term debt of $5.90 million. The 2011 income statement showed an interest expense of $190,000. During 2011, Marias Tennis Shop, Inc. realized the following:

The 2010 balance sheet of Maria's Tennis Shop, Inc., showed long-term debt of $5.7 million, and the 2011 balance sheet showed long-term debt of $5.90 million. The 2011 income statement showed an interest expense of $190,000. During 2011, Marias Tennis Shop, Inc. realized the following:

Explanation / Answer

Operating Cash Flow (OCF) = 1,386,000

Cash Flow from Assets (CFFA) = Cash Flow to Creditors + Cash Flow to Stockholders
CFFA = 70,000 + (-10,000)
CFFA = 60,000

CFFA = Operating Cash Flow - Net Capital Spending - Change in Net Working Capital
60,000 = OCF - 1,420,000 - (-79,000)
45,000 = OCF - 1,341,000
1,386,000 = OCF   

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