Question

The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $2.5 million, and the 2015 balance sheet showed long-term debt of $2.65 million. The 2015 income statement showed an interest expense of $100,000. What was the firm’s cash flow to creditors during 2015?The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $2.5 million, and the 2015 balance sheet showed long-term debt of $2.65 million. The 2015 income statement showed an interest expense of $100,000. What was the firm’s cash flow to creditors during 2015?

Answer 1

50000

Explanation;

The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $2.5 million, and the 2015 balance sheet showed long-term debt of $2.65 million. The 2015 income statement showed an interest expense of $100,000. What was the firm’s cash flow to creditors during 2015?

Particulars Amount$

Interest Paid(a) 100,000

Less

Net new borrowings

Long Term debt at the end Of 2015 2650000

Less:Long Term debts in the beginning 2500000

Net new borrowings(b) 150000

Cash flow to creditors(a)-(b) 50000

cash flow to credits during 2015 is 50000

Answer 2

Total CashFlow to creditors : ($50.000).

Step-by-step explanation:

Total Cash flow to creditors it's = I - E + B, where I it's Interest, E it's Ending Long Term Debt and B it's Beginning Long Term Debt.

With this, it means we get money from creditors instead of a payment to them.