he December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1

Question

he December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,470,000, $154,000 in the common stock account and $2,790,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1,720,000, $164,000 in the common stock account and $3,090,000 in the additional paid-in surplus account. The 2014 income statement showed an interest expense of $101,000 and the company paid out $159,000 in cash dividends during 2014. The firm’s net capital spending for 2014 was $1,100,000, and the firm reduced its net working capital investment by $139,000. (Enter your answer as directed, but do not round intermediate calculations.) Required: What was the cash flow to creditors during 2014? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567)) Cash flow to creditors $ Required: What was the firm’s cash flow to stockholders during 2014? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567)) Cash flow to stockholders $ Required: What was the firm’s cash flow from assets during 2014? (Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567)) Cash flow from assets $ Required: What was the firm’s operating cash flow during 2014? (Enter your answer in dollars, not millions of dollars (e.g., 1,234,567)) Operating cash flow $

Explanation / Answer

Dec 31.2014 Dec 31.2013 Change over 2013. Common Equity                        164,000                              154,000                              10,000 APIC -Common Equity                    3,090,000                           2,790,000                            300,000 LT Debt                    1,720,000                           1,470,000                            250,000 Interest expense                        101,000 Cash dividend paid                        159,000 Net Capital Spending                      1,100,000 Reduction in NWC                        139,000 a Cash flow to Creditors in 2014 =Interest Paid-Net new Borrowing=(101000-250000)= $           (149,000.00) b Cash flow to stockholders in 2014=Dividend paid-New equity raised=(159000-310000)= $           (151,000.00) c Cash flow from Assets in 2014= Cash flow to Creditors+Cash flow to stockholders= $           (300,000.00) d Operating Cash flow   Cash Flow from Assets=Operating cash flow-Net capital spending-changes in net working capital So -300000=Op Cash flow-1100000-(-139000) Operating Cash flow =-300000+961000= $             661,000.00

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