Ratio of Liabilities to Stockholders' Equity and Times Interest Eamed The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: 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 Current Year Current year Previous year $365.000 270.000 1.140.000 70.000 780.000 2.700.000 Previous Year $132.000 270.000 1.410.000 90.000 790.000 2.140.000 The income before income tax expense was $437.100 and $382.500 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. 0.901 x b. Determine the times interest eamed ratio for both years. Round to one decimal place. Current year Previous year
Ratio of Liabilities to Stockholders' Equity and Times Interest Eamed The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: 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 Current Year Current year Previous year $365.000 270.000 1.140.000 70.000 780.000 2.700.000 Previous Year $132.000 270.000 1.410.000 90.000 790.000 2.140.000 The income before income tax expense was $437.100 and $382.500 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. 0.901 x b. Determine the times interest eamed ratio for both years. Round to one decimal place. Current year Previous year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
H1.
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
Previous
Year
$365,000
270,000
1,140,000
Accounts payable
Current maturities of serial bonds payable
Serial bonds payable, 10%
Common stock, $1 par value
90,000
Paid-in capital in excess of par
790,000
Retained earnings
2,140,000
The income before income tax expense was $437,100 and $382,500 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.
0.901 X
$132,000
270,000
1,410,000
70,000
780,000
2,700,000
Current year
Previous year
b. Determine the times interest earned ratio for both years. Round to one decimal place.
Current year
Previous year
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education