Question

The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1.390,000. $138,000 in the common stock account, and $2,630,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,560,000, $148,000 in the common stock account and $2,930.000 in the additional paid-in surplus account The 2019 income statement showed an interest expense of $93.000 and the company paid out $143,000 in cash dividends during 2019. The firm's net capital spending for 2019 was $940.000, and the firm reduced its net working capital investment by $123,000. What was the firm's 2019 operating cash flow. or OCF? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1.234.567.) Operating cash flow

Answer 1

Cash flow from assets =	OCF - Change in NWC - Net capital spending
-$244,000 =	OCF - (-$123,000) - ($940,000)
OCF =	-$244,000 - $123,000 + $940,000
OCF =	$573,000
Working
Cash flow to creditors =	Interest paid - Net new borrowing
=	Interest paid - (LT Debt ending - LT Debt beginning)
=	$93,000 - ($1,560,000 - 1,390,000)
=	-$77,000
Cash flow to stockholders =	Dividends paid - Net new equity
=	Dividends paid - [(Common ending + Add. Paid in Surplus ending) - (Common beginning + Add. Paid in Surplus beginning)]
=	$143,000 - [($148,000 + $2,930,000) - ($138,000 + $2,630,000)]
=	-$167,000
Cash flow from assets =	Cash flow to creditors + Cash flow to stockholders
=	-$77,000 - $167,000
=	-$244,000