Balance sheet and income statement data indicate the following:Bonds payable, 6% (this is year 4 of 20 years)$1,200,000Income before income tax for year340,000Income tax for year80,000Interest payable9,000Interest receivable26,000Based on the data presented above, what is the times interest earned ratio? (Round to two decimal places.)a.4.72b.5.72c.4.83d.6.83

Time interest earned ratio: Time interest earned ratio is a measure of a company's ability to meet…

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% (this is year 4 of 20 years)	$1,200,000
Income before income tax for year	340,000
Income tax for year	80,000
Interest payable	9,000
Interest receivable	26,000

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

a.4.72

b.5.72

c.4.83

d.6.83

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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