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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?

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mltn1980

Answer:

Total CashFlow to creditors : ($50.000).

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.  

obasola1

Answer:

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

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