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The December 31, 2021, balance sheet of Chen, Incorporated, showed long-term debt of $1.38 million, and the December 31, 2022, balance sheet showed long-term debt of $1.52 million. The 2022 income statement showed an interest expense of $104,500. What was the firm’s cash flow to creditors during 2022?
The December 31, 2021, balance sheet of Chen, Incorporated, showed long-term debt of $1.38 million, and the December 31, 2022, balance sheet showed long-term debt of $1.52 million. The 2022 income statement showed an interest expense of $104,500. What was the firm’s cash flow to creditors during 2022?
Final answer:The firm's cash flow to creditors during 2022 was $64,500.Explanation:To calculate the firm's cash flow to creditors during 2022, we need to consider the change in long-term debt and the interest expense. Cash flow tocreditorsrepresents the net amount of cash paid to creditors (principal and interest) during a specific period. In this case, the long-term debt increased from $1.38 million to $1.52 million, indicating that the firm borrowed additional funds.To determine the cash flow to creditors, we need to subtract the increase in long-term debt from the interestexpense. Therefore, the firm's cash flow to creditors during 2022 would be $104,500 - ($1.52 million - $1.38 million) = $64,500.Learn more about cash flow to creditors here:brainly.com/question/33822437#SPJ2...