The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $

Question

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,425,000, and the December 31, 2016, balance sheet showed long-term debt of $1,630,000. The 2016 income statement showed an interest expense of $96,500. What was the firm's cash flow to creditors during 2016? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Cash flow to creditors $

Explanation / Answer

Net new debt=Long term debt for 2016-Long term debt for 2015

=(1,630,000-1425000)=$205000

Hence cash flow to creditors=Interest expense-Net new debt

=(96500-205000)

which is equal to

=($108500)(Negative).

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