The Canada Technology Corporation (CTC) financial statements below: CTC's long-term debt bears interest at 6%. During the year ended December 31, 2020, CTC's times-interest-earned ratio was: a) 100 timesb) 110 times c) 117 times d) 125 times 7/23/23, 8:55 PMNet revenueCost of goods soldGross profitOperating expenses:Selling, general, and administrativeResearch, development, and engineeringSpecial chargesCanada Technology CorporationConsolidated Statements of Income(in millions, except per share amounts)Total operating expensesOperating incomeInvestment and other income (loss), netIncome before income taxesIncome tax expenseNet incomeEarnings per common share:Basic$Consolidated income statements$Years Ended December 31,202041,444 $33,8927,5523,5444644,0083,5441803,7241,079$ 2,645 $1.03 $201935,404 $29,0556,3493,0504553,5052,8441833,0279052,122 $0.82 $201831,16825,6615,5072,7844524823,7181,789(58)1,7314851,2460.48 7/23/23, 8:55 PMAssetsCurrent assets:Canada Technology CorporationConsolidated Statements of Financial Position(in millions)Cash and cash equivalentsShort-term investmentsAccounts receivable, netInventoriesOtherTotal current assetsProperty, plant, and equipment, netInvestmentsOther non-current assetsTotal assetsLiabilities and Shareholders' EquityCurrent liabilities:Accounts payableAccrued and otherTotal current liabilitiesLong-term debtOther non-current liabilitiesCommitments and contingent liabilitiesTotal liabilitiesShareholders' equity:Preferred shares; shares issued: 0Common shares; shares authorized: 7,000;shares issued: 2,556 and 2,579, respectivelyRetained earningsOther comprehensive lossOtherConsolidated balance sheetsTotal shareholders' equityTotal liabilities and shareholders' equity$$$December 31,20204,317 $8353,6353271,51910,6331,5176,77039119,311 $7,316 $3,58010,8965051,63013,0312846,131(83)(52)6,280$ 19,311 $20194,2324062,5863061,3948,9249135,26736615,4705,9892,9448,9335061,15810,5971,4793,486(33)(59)4,87315,470

Times-interest-earned ratio shows a relationship between the company’s income and its debt. It is a…

Canada Technology Corporation Consolidated Statements of Income (in millions, except per share amounts) Net revenue Cost of goods sold Gross profit Operating expenses: Selling, general, and administrative Research, development, and engineering Special charges Total operating expenses Operating income Investment and other income (loss), net Income before income taxes Income tax expense Net income Earnings per common share: Basic $ $ $ Years Ended December 31, 2018 2020 41,444 $ 33,892 7,552 3,544 464 4,008 3,544 180 3,724 1,079 2,645 $ 1.03 $ 2019 35,404 $ 29,055 6,349 3,050 455 3,505 2,844 183 3,027 905 2,122 $ 0.82 $ 31,168 25,661 5,507 2,784 452 482 3,718 1,789 (58) 1,731 485 1,246 0.48

Canada Technology Corporation Consolidated Statements of Income (in millions, except per share amounts) Net revenue Cost of goods sold Gross profit Operating expenses: Selling, general, and administrative Research, development, and engineering Special charges Total operating expenses Operating income Investment and other income (loss), net Income before income taxes Income tax expense Net income Earnings per common share: Basic $ $ $ Years Ended December 31, 2018 2020 41,444 $ 33,892 7,552 3,544 464 4,008 3,544 180 3,724 1,079 2,645 $ 1.03 $ 2019 35,404 $ 29,055 6,349 3,050 455 3,505 2,844 183 3,027 905 2,122 $ 0.82 $ 31,168 25,661 5,507 2,784 452 482 3,718 1,789 (58) 1,731 485 1,246 0.48

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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