Question

The 2018 balance sheet of Spieth's Golf Shop, Inc., showed Long-term debt of $1.565 million, and the 2019 balance sheet showed long-term debt of $1.645 million. The 2019 income statement showed an interest expense of $170,000. The 2018 balance sheet of Spieth’s Golf Shop, Inc., showed $490,000 in the common stock account and $3.4 million in the additional paid-in surplus account. The 2019 balance sheet showed $525,000 and $3.75 million in the same two accounts, respectively. If the company paid out $335,000 in cash dividends during 2019, what was the cash flow to stockholders for the year? Given the information for Spieth’s Golf Shop, Inc., in the previous two problems, suppose you also know that the firm’s net capital spending for 2019 was $735,000 and that the firm reduced its net working capital investment by $96,000. What was the firm’s 2019 operating cash flow, or OCF?

Answer 1