Balance sheet and income statement data indicate the following:Bonds payable, 6% (due in 15 years)$1,200,000Income before income tax for year320,000Income tax for year80,000Interest payable33,000Interest receivable19,000Based on the data presented above, what is the times interest earned ratio? (Round to two decimal places.)

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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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Balance sheet and income statement data indicate the following:

Bonds payable, 6% (due in 15 years)	$1,200,000
Income before income tax for year	320,000
Income tax for year	80,000
Interest payable	33,000
Interest receivable	19,000

Based on the data presented above, what is the times interest earned ratio? (Round to two decimal places.)

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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