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: Line Item Description Amount Bonds payable, 10% (due in 2 years) $863,000 Preferred 5% stock, $100 par (no change during year) 215,400 Common stock, $50 par (no change during year) 1,965,500 Income before income tax expense 373,064 Income tax expense 76,993 Common dividends paid 98,275 Preferred dividends paid 10,770 Based on the data presented, what is the times interest earned ratio? Round your answer to two decimal places.

a. 2.31

b. 5.32

c. 3.32

d. 0.43

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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