3. Balance sheet and income statement data indicate the following:Bonds payable, 10% (due in two years)$936,000Preferred 5% stock, $100 par (no change during year)202,000Common stock, $50 par (no change during year)1,623,000Income before income tax for year380,000Income tax for year76,000Common dividends paid81,150Preferred dividends paid10,100Based on the data presented, what is the times interest earned ratio (rounded to one decimal place)?a.7.1b.5.1c.4.1d.3.1

Answered: Balance sheet and income statement data…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. Balance sheet and income statement data indicate the following:

Bonds payable, 10% (due in two years)	$936,000
Preferred 5% stock, $100 par (no change during year)	202,000
Common stock, $50 par (no change during year)	1,623,000
Income before income tax for year	380,000
Income tax for year	76,000
Common dividends paid	81,150
Preferred dividends paid	10,100

Based on the data presented, what is the times interest earned ratio (rounded to one decimal place)?

a.7.1

b.5.1

c.4.1

d.3.1

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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