The 2010 balance sheet of Maria\'s Tennis Shop, Inc., showed long-term debt of $
ID: 2630134 • Letter: T
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
Solution :- Cash flow from assets = Cash flow to stockholders + Cash flow to creditors.
= 70000 + (-) 10000.
= 60000.
Cash flow from assets = Operating cash flow - Net Capital Spending - Change in Net Working Capital.
60000 = Operating cash flow - 1420000 - (-) 79000.
60000 = Operating cash flow - 1420000 + 79000
60000 = Operating cash flow - 1341000
Operating cash flow = 1341000 + 60000
Operating cash flow = $ 1401000.
Conclusion :- Operating cash flow of firm for Year 2011 = $ 1401000.
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