Garnet Company reported the following on its income statement: Income before income taxes $450,000 Income tax expense 52,000 Net income $398,000 An analysis of the income statement revealed that interest expense was $50,000. Garnet Company's times interest earned are earned was _____.

Garnet Company reported the following on its income statement: Income before income taxes $450,000 Income tax expense 52,000 Net income $398,000 An analysis of the income statement revealed that interest expense was $50,000. Garnet Company's times interest earned are earned was _____.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 19BEA

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Question

Question Content Area
Garnet Company reported the following on its income statement:

Income before income taxes $450,000

Income tax expense 52,000

Net income $398,000

An analysis of the income statement revealed that interest expense was $50,000. Garnet Company's times interest earned are earned was _____.

a.11 times

b.8.1 times

c.10 times

d.7.8 times

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