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27 July, 04:58

In a recent year Bonita Industries had net income of $130000, interest expense of $50000, and income tax expense of $21000. What was Bonita Industries's times interest earned for the year? a. 2.60 b. 4.02 c. 3.60 d. 3.02

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  1. 27 July, 05:28
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    b. 4.02

    Explanation:

    Time interest earned is actually tells us how many times it's interest is the company earning so that formula for times interest earned is

    Earnings before income and tax/Interest expense.

    So we have to add interest expense and tax expense back to net income.

    130,000+50,000+21,000=201,000

    201,000/50,000=4.02
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