Question

r reading the lesson materials, please complete the Lesson 2 HW. This is not timed, and you will have 3 mpts. The highest score will be recorded in the grade book. Question 1 1.5 pts The 2013 balance sheet of Maria's Tennis Shop, Inc, showed long-term debt of $2.2 million, and the 2014 balance sheet showed long-term debt of $3.5 million. The 2014 income statement showed an interest expense of $602,000. What was the firm's cash flow to creditors during 2014? (Round final answer to the nearest whole dollar. Do not round intermediate calculations). Topic: Cash Flow Identity 1.5 pts Question 2

Answer 1

Net New Long-term Debt = Long-term Debt, 2014 - Long-term Debt, 2013
Net New Long-term Debt = $3,500,000 - $2,200,000
Net New Long-term Debt = $1,300,000

Cash Flow to Creditors = Interest Expense - Net New Long-term Debt
Cash Flow to Creditors = $602,000 - $1,300,000
Cash Flow to Creditors = -$698,000