Joe\'s Spacecraft Corp. shows the following information on its 2009 income state

Question

Joe's Spacecraft Corp. shows the following information on its 2009 income statement: sales = $203,000; costs = $95,000; other expenses = $5,700; depreciation expense = $9,000; interest expense = $12,900; taxes = $28,140; dividends = $10,000. In addition, you're told that the firm issued $7,100 in new equity during 2009 and redeemed $8,700 in outstanding long-term debt.

Joe's Spacecraft Corp. shows the following information on its 2009 income statement: sales = $203,000; costs = $95,000; other expenses = $5,700; depreciation expense = $9,000; interest expense = $12,900; taxes = $28,140; dividends = $10,000. In addition, you're told that the firm issued $7,100 in new equity during 2009 and redeemed $8,700 in outstanding long-term debt.

Explanation / Answer

a) The 2009 operating cash flow is as under:

Sales - Cost - Other expenses - Taxes

i.e 203000- 95000 - 5700 - 28140 = 74160

b) cash flow to creditors = Interest expense = 12900

C ) Cash flow to stock holders

equity issue - dividends= 7100- 10000 = - 2900

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