Question

During the past year, Yard Services paid $36,800 in interest along with $2,000 in dividends. The company issued $3,000 of stock and $16,000 of new debt. The company reduced the balance due on its old debt by $18,400. What is the amount of the cash flow to creditors?

Answer 1

Answer:

The amount of the cash flow to creditors is $39200.

Explanation:

cash flow to creditors = Interest payments + reduced balance of old debt - Issued balance of new debt

                                     = ($36800 + $18400 - $16000)

                                    = $39200.

Therefore, the amount of the cash flow to creditors is $39200.