Ask Question
10 September, 13:17

Balance sheet and income statement data indicate the following: Bonds payable, 6% (issued 1994, due 2019) $1,200,000 Preferred 8% stock, $100 par (no change during the year) 200,000 Common stock, $50 par (no change during the year) 1,000,000 Income before income tax for year 320,000 Income tax for year 80,000 Common dividends paid 60,000 Preferred dividends paid 16,000 Based on the data presented above, what is the times interest earned ratio (rounded to two decimal places) ?

+3
Answers (1)
  1. 10 September, 14:33
    0
    times interest earned ratio = 4.21

    Explanation:

    times interest earned ratio = income before interest and taxes (EBIT) / interest expense

    income before interest and taxes = $320,000

    interest expense = $60,000 + $16,000 = $76,000

    times interest earned ratio = $320,000 / $76,000 = 4.21
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Balance sheet and income statement data indicate the following: Bonds payable, 6% (issued 1994, due 2019) $1,200,000 Preferred 8% stock, ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers