Question

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,460,000, and the December 31, 2016, balance sheet showed long-term debt of $1,700,000. The 2016 income statement showed an interest expense of $100,000.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.)

Answer 1

- $140,000

Step-by-step explanation:

The Cash flow to creditors = Interest paid - Net new borrowing

= Interest paid - (Ending Long term debt - Beginning Long term debt)

= $100,000 - ($1,700,000 - $1,460,000)

= $100,000 - $240,000

= - $140,000

Therefore, the cash flow to creditors is - $140,000.