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Horizon Enterprises Ltd. presents the following financial data for 2022: Item Accounts Receivable (Jan 1) Accounts Receivable (Dec 31) Merchandise Inventory (Jan 1) Merchandise Inventory (Dec 31) Gross Sales Sales Returns & Allowances Amount $800,000 $1,050,000 $950,000 $1,100,000 $5,500,000 $200,000 $5,300,000 $3,800,000 Net Sales Cost of Goods Sold (COGS) Income Before Interest and Taxes (EBIT) $850,000 Interest on Bonds Net Income $250,000 $450,000 Calculate the Times Interest Earned (TIE) Ratio and choose the correct answer: a) 3.40 times per year b) 3.75 times per year c) 2.50 times per year d) 4.20 times per year

Horizon Enterprises Ltd. presents the following financial data for 2022: Item Accounts Receivable (Jan 1) Accounts Receivable (Dec 31) Merchandise Inventory (Jan 1) Merchandise Inventory (Dec 31) Gross Sales Sales Returns & Allowances Amount $800,000 $1,050,000 $950,000 $1,100,000 $5,500,000 $200,000 $5,300,000 $3,800,000 Net Sales Cost of Goods Sold (COGS) Income Before Interest and Taxes (EBIT) $850,000 Interest on Bonds Net Income $250,000 $450,000 Calculate the Times Interest Earned (TIE) Ratio and choose the correct answer: a) 3.40 times per year b) 3.75 times per year c) 2.50 times per year d) 4.20 times per year

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
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Horizon Enterprises Ltd. presents the following financial data for 2022: Item Accounts Receivable (Jan 1) Accounts Receivable (Dec 31) Merchandise Inventory (Jan 1) Merchandise Inventory (Dec 31) Gross Sales Sales Returns & Allowances Amount $800,000 $1,050,000 $950,000 $1,100,000 $5,500,000 $200,000 $5,300,000 $3,800,000 Net Sales Cost of Goods Sold (COGS) Income Before Interest and Taxes (EBIT) $850,000 Interest on Bonds Net Income $250,000 $450,000 Calculate the Times Interest Earned (TIE) Ratio and choose the correct answer: a) 3.40 times per year b) 3.75 times per year c) 2.50 times per year d) 4.20 times per year
Transcribed Image Text:Horizon Enterprises Ltd. presents the following financial data for 2022: Item Accounts Receivable (Jan 1) Accounts Receivable (Dec 31) Merchandise Inventory (Jan 1) Merchandise Inventory (Dec 31) Gross Sales Sales Returns & Allowances Amount $800,000 $1,050,000 $950,000 $1,100,000 $5,500,000 $200,000 $5,300,000 $3,800,000 Net Sales Cost of Goods Sold (COGS) Income Before Interest and Taxes (EBIT) $850,000 Interest on Bonds Net Income $250,000 $450,000 Calculate the Times Interest Earned (TIE) Ratio and choose the correct answer: a) 3.40 times per year b) 3.75 times per year c) 2.50 times per year d) 4.20 times per year
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