Milton, Inc. provides the following income statement for 2025: Net Sales $240,000 Cost of Goods Sold 110,000 Gross Profit $130,000 Operating Expenses: Selling Expenses 45,000 Administrative Expenses 12,000 Total Operating Expenses 57,000 Operating Income $73,000 Other Income and (Expenses): Loss on Sale of Capital Assets (26,000) Interest Expense (1,000) Total Other Income and (Expenses) (27,000) Income Before Income Taxes $46,000 Income Tax Expense 5,000 Net Income $41,000 Calculate the times−interest−earned ratio. (Round your answer to two decimal places.)
Milton, Inc. provides the following income statement for 2025: Net Sales $240,000 Cost of Goods Sold 110,000 Gross Profit $130,000 Operating Expenses: Selling Expenses 45,000 Administrative Expenses 12,000 Total Operating Expenses 57,000 Operating Income $73,000 Other Income and (Expenses): Loss on Sale of Capital Assets (26,000) Interest Expense (1,000) Total Other Income and (Expenses) (27,000) Income Before Income Taxes $46,000 Income Tax Expense 5,000 Net Income $41,000 Calculate the times−interest−earned ratio. (Round your answer to two decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
|
Milton, Inc. provides the following income statement for 2025:
Net Sales
|
$240,000
|
Cost of Goods Sold
|
110,000
|
Gross Profit
|
$130,000
|
Operating Expenses:
|
|
Selling Expenses
|
45,000
|
Administrative Expenses
|
12,000
|
Total Operating Expenses
|
57,000
|
Operating Income
|
$73,000
|
Other Income and (Expenses):
|
|
Loss on Sale of Capital Assets
|
(26,000)
|
Interest Expense
|
(1,000)
|
Total Other Income and (Expenses)
|
(27,000)
|
Income Before Income Taxes
|
$46,000
|
Income Tax Expense
|
5,000
|
Net Income
|
$41,000
|
Calculate the
times−interest−earned
ratio. (Round your answer to two decimal places.)Expert Solution
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