Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

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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