Rate of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years Current Year Accounts payable Current maturities of serial bonds payable Serial bonds payable, 10% Previous Year $756,000 470,000 1,910,000 Common stock, $1 par value 90,000 Paid-in capital in excess of par 990,000 Retained earnings 1,400,000 2,710,000 The income before income tax expense was 1999,600 and 1874,700 for the current and previous years, respectively Determine the ratio of abilities to stockholders' equity at the end of each year. Round to one decimal place Current year $196,000 470,000 2,380,000 110,000 990,000 Determine the times interest earned ratio for both years and to one decimal place
Rate of Liabilities to Stockholders' Equity and Times Interest Earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years Current Year Accounts payable Current maturities of serial bonds payable Serial bonds payable, 10% Previous Year $756,000 470,000 1,910,000 Common stock, $1 par value 90,000 Paid-in capital in excess of par 990,000 Retained earnings 1,400,000 2,710,000 The income before income tax expense was 1999,600 and 1874,700 for the current and previous years, respectively Determine the ratio of abilities to stockholders' equity at the end of each year. Round to one decimal place Current year $196,000 470,000 2,380,000 110,000 990,000 Determine the times interest earned ratio for both years and to one decimal place
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ratio of Liabilities to Stockholders Equity and Times Interest Earned
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
Current
Year
Accounts payable
Current maturities of serial bonds payable
Serial bonds payable, 10%
Common stock, $1 par value
Paid-in capital in excess of par
Retained earnings
$756,000
470,000
1,910,000
90,000
990,000
3,400,000
Previous
Year
2,380,000
110,000
990,000
2,710,000
The income before income tax expense was 1999,600 and 1874,700 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place
The ratio of liabilities to stockholders' equity has
results are the combined result of a
$198,000
470,000
Current year
Previous year
b. Determine the times interest earned ratio for both years sund to one decimal place
Current year
and the number of times bond interest charges were samed has)
from the previous year. These
income before income taxes and
interest expense in the current year compared to the previous year
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