Exercise 9-19 (Algo) Computing and interpreting times interest earned LO A1 Use the following information from separate companies a through d: Net Income (Loss) Interest Expense Income Taxes a. $ 130,000 $ 61,100 $ 32,500 b. 124,600 12,460 44,856 c. 110,500 37,570 46,410 d. 133,100 6,655 63,888 Compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due?

Exercise 9-19 (Algo) Computing and interpreting times interest earned LO A1 Use the following information from separate companies a through d: Net Income (Loss) Interest Expense Income Taxes a. $ 130,000 $ 61,100 $ 32,500 b. 124,600 12,460 44,856 c. 110,500 37,570 46,410 d. 133,100 6,655 63,888 Compute times interest earned. Which company indicates the strongest ability to pay interest expense as it comes due?

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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Problem 17-6AA (Algo) Income statement computations and format LO A2 [The following information applies to the questions displayed below] Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Assume that the company's income tax rate is 40% for all items. a. Interest revenue. b. Depreciation expense-Equipment c. Loss on sale of equipment d. Accounts payable. e. Other operating expenses f. Accumulated depreciation-Equipment g. Gain from settlement of lawsuit h. Accumulated depreciation-Buildings i. Loss from operating a discontinued segment (pretax) j. Gain on insurance recovery of tornado damage k. Net sales 1. Depreciation expense-Buildings B. Correction of overstatement of prior year's sales (pretax) n. Gain on sale of discontinued segment's assets (pretax) o. Loss from settlement of lawsuit p. Income tax expense q. Cost of goods sold Debit $ 35,400 27,250 107,800 19,650 53,400 17,400 25,150 496,500 Credit $…
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Question Content Area Hsu Company reported the following on its income statement: Income before income taxes $325,364 Income tax expense 97,609 Net income $227,755 Interest expense was $73,540. Hsu Company's times interest earned ratio (rounded to two decimal places) is a.4.42 times b.3.1 times c.2.1 times d.5.42 times