According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipmen fell 3.8 percent between January and December 2018. Let's see whether these changes are reflected in the income statement of Wizard Computers for the year ended December 31, 2018. Sales Revenue Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 2018 $ 106,000 63,000 43,000 36,600 560 5,840 1,500 $4,340 2017 $ 129,000 73,900 55,100 38,200 505 16,395 5,600 $ 10,795 Required: 1. Compute the times interest earned ratios for 2018 and 2017. 2. Does Wizard generate sufficient net income in both years (before taxes and interest) to cover the cost of debt financing?

According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipmen fell 3.8 percent between January and December 2018. Let's see whether these changes are reflected in the income statement of Wizard Computers for the year ended December 31, 2018. Sales Revenue Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 2018 $ 106,000 63,000 43,000 36,600 560 5,840 1,500 $4,340 2017 $ 129,000 73,900 55,100 38,200 505 16,395 5,600 $ 10,795 Required: 1. Compute the times interest earned ratios for 2018 and 2017. 2. Does Wizard generate sufficient net income in both years (before taxes and interest) to cover the cost of debt financing?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Q.47 Using the repeatability assumption, what is the PW of Alternative Y? O. $22,436 O. $58,192 O. $7,740 O. $12,385 Q. 48 Using coterminated assumption, what is the FW of Alternative X? O. $12,385 O. $7.740 O. $22,436 O. $58,192 Q. 49 Using the coterminated assumption, what is the FW of Alternative Y? O. $22,436 O. $58,192 O. $12,385 O. $7,740 Q. 50 Which alternative is selected? O. Alternatíve X O. Alternative Y O. neither X nor Y is economically attractive O. X and Y are equally attractive
7.Explain briefly on the misconception about Riba
7. Explain the M&M Proposition I and II using your own words.
What is the importance of a Form 8-K? What is the importance of a proxy statement?
how do i do PR 13-3A
What is the solution to 0.5x - 2 < 5.5? O A. X < 7 о В. х< 9 С. X < 13 D. x < 15
5) Explain why we de-lever and re-lever the PL.
8. Enumerate and explain the various application controls.
Zina Manufacturing Company started and completed Job 501 in December with the following Job Cost Sheet and transferred it to the warehouse. Direct Materials Date Dec 17 Dec 30 Total Direct Labor Amount Date Amount $2,000 Dec 20 $4,000 8,000 Dec 30 3,800 Total Job Cost Sheet - Job No. 501 Total Cost The journal entry to record the transaction is A) WIP Inventory FG Inventory B) Cost of Goods Sold WIP Inventory C) FG Inventory WIP Inventory D) FG Inventory WIP Inventory Debit Credit 35,800 17,800 17,800 Manufacturing Overhead Date Amount Dec 24 $10,000 Dec 30 8,000 Total 35,800 35,800 17,800 17,800 35,800
pls answer no. 4 and 5
E12.18
Num.10