The 2017 balance sheet of kerber’s tennis shop, inc., showed long-term debt of $1.87 million, and the 2018 balance sheet showed long-term debt of $2.21 million. the 2018 income statement showed an interest expense of $255,000. what was the firm’s cash flow to creditors during 2018? (a negative answer should be indicated by a minus sign. enter your answer in dollars, not millions of dollars, e. g., 1,234,567.)

The firm’s cash flow to creditors during 2018 is -$85,000

Explanation:

The steps to compute the firm’s cash flow to creditors during 2018 is shown below:

Step 1: First the new debt is need to be calculated

Step 2: The step 1 amount is subtracted from interest expense amount. And Finally, the cash flow to creditors came

where,

Increase debt = 2018 long term debt - 2017 long term debt

                = $2.21 million - $1.87 million

                = 0.34 million = $3,40,000

Now,

Cash flow to creditors = Interest expense - Increase debt

                                     = $255,000 - $3,40,000

                                     = -$85,000

Thus, the firm’s cash flow to creditors during 2018 is -$85,000

answercombination of ability and experience of the partners;