Ratio of liabilities to stockholders' equity and times interest earnedThe following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:CurrentYearPreviousYearAccounts payable$318,000$272,000Current maturities of serial bonds payable410,000410,000Serial bonds payable, 10%2,020,0002,430,000Common stock, $1 par value90,000120,000Paid-in capital in excess of par1,010,0001,010,000Retained earnings3,480,0002,760,000The income before income tax expense was $631,800 and $552,800 for the current and previous years, respectively.a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round your answers to one decimal place.Current yearPrevious yearb. Determine the times interest earned ratio for both years. Round your answers to one decimal place.Current yearPrevious yearc. The ratio of liabilities to stockholders' equity hasand the number of times bond interest charges were earned hasfrom the previous year. These results are the combined result of aincome before income taxes andinterest expense in the current year compared to the previous year.

The objective of the question is to calculate the ratio of liabilities to stockholders' equity and…

Answered: Ratio of liabilities to stockholders'…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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: CurrentYear PreviousYear Accounts payable $698,000 $212,000 Current maturities of serial bonds payable 460,000 460,000 Serial bonds payable, 10% 1,920,000 2,380,000 Common stock, $1 par value 100,000 130,000 Paid-in capital in excess of par 1,130,000 1,130,000 Retained earnings 3,900,000 3,100,000 The income before income tax expense was $714,000 and $624,800 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. Current year fill in the blank 1 Previous year fill in the blank 2 b. Determine the times interest earned ratio for both years. Round to one decimal place. Current year fill in the blank 3 Previous year fill in the blank 4
Current Attempt in Progress The following data are taken from the financial statements of Blossom Company as of the end o alphabetical order. Accounts payable $31,000 Net income $52,000 Accounts receivable 64,000 Other current liabilities 18,000 Cash 32,800 Salaries and wages payable 6,000 Gross profit 166,500 Total assets 275,000 Income before income taxes 56,000 Total liabilities 165,000 Additional information: The average common shares outstanding during the year was 40,000. Compute the following: (Round current ratlo and eamings per share to 2 decimal places, eg. $2.51.) (a) Current ratio :1 (b) Working capital %24 (c) Earnings per share 24 (d) Debts to assets ratio
Preparing a Statement of Comprehensive Income and a Statement of Stockholders’ EquityThe following pretax amounts are taken from the adjusted trial balance of Gomez Corp. at December 31, its annual year-end. Sales revenue $1,400,000 Unrealized holding loss on debt securities $16,800 Cost of goods sold 784,000 Foreign currency translation adjustment, loss 25,200 Operating expenses 392,000 Common stock, 50,000 shares outstanding 210,000 Interest expense 70,000 Other information:- Assume an average 25% corporate tax rate on all items.- Assume no changes in common stock during the year.- Accumulated other comprehensive income had a $56,000- Retained earnings had a $541,800- Dividends declared and paid during the year were $70,000Requireda. Prepare two separate but consecutive statements of income and comprehensive income. Ignore earnings per share disclosures.● Note: Do not use negative signs with any of your answers. Gomez Corp. Income Statement For Year Ended…
Instructions Journalize the selected transactions. Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows: a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at $40 per share plus a $150 brokerage commission. The investment is classified as an available-forsale investment. g. Purchased 8,000 shares of treasury common stock at $33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock…
Jay Co. reported the following financial data for its most current year: Beginning-of-year common stock $105,000 Beginning-of-year retained earning 175,400 Net Income 33,400 Dividends Paid 10,500 Issuance of common stock 24,000 Compute Jay’s end-of-year total stockholders’ equity.Total Stockholders' Equity= $?
Question Content Area Balance sheet and income statement data indicate the following: Bonds payable, 6% (due in 15 years) $1,114,580 Preferred 8% stock, $100 par (no change during the year) 200,000 Common stock, $50 par (no change during the year) 1,000,000 Income before income tax for year 407,169 Income tax for year 122,151 Common dividends paid 60,000 Preferred dividends paid 16,000 Based on the data presented, what is the times interest earned ratio (round to two decimal places)? a. 3.26 b. 7.09 c. 4.26 d. 6.09
The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year: 1 Common stock, $45 par $3,042,000.00 2 Paid-In Capital from Sale of Treasury Stock 115,400.00 3 Paid-In Capital in Excess of Par-Common Stock 270,400.00 4 Retained Earnings 20,585,800.00 5 Treasury Stock 321,900.00 Prepare the Stockholders’ Equity section of the balance sheet as of June 30 using Method 1 of Exhibit 8. Eighty thousand shares of common stock are authorized, and 8,700 shares have been reacquired. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Accounts and Amount Descriptions Common stock dividends Common stock, $45 par; 80,000 shares authorized, 67,600 issued Excess over par From sale of treasury…
Category Prior Year Current Year Accounts payable 3,123.00 5,969.00 Accounts receivable 6,987.00 8,940.00 Accruals 5,642.00 6,108.00 Additional paid in capital 19,885.00 13,325.00 Cash ??? ??? Common Stock 2,850 2,850 COGS 22,986.00 18,120.00 Current portion long-term debt 500 500 Depreciation expense 1,035.00 988.00 Interest expense 1,290.00 1,167.00 Inventories 3,006.00 6,743.00 Long-term debt 16,856.00 22,001.00 Net fixed assets 75,521.00 74,000.00 Notes payable 4,072.00 6,540.00 Operating expenses (excl. depr.) 19,950 20,000 Retained earnings 35,244.00 34,874.00 Sales 46,360 45,055.00 Taxes 350 920 What is the firm's cash flow from financing?
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 Prior Year Accounts payable $100,000 $161,000 Current maturities of serial bonds payable 210,000 210,000 Serial bonds payable, 10% 1,120,000 1,330,000 Common stock, $1 par value 60,000 70,000 Paid-in capital in excess of par 630,000 630,000 Retained earnings 2,170,000 1,730,000 The income before income tax expense was $465,500 and $407,300 for the current and prior years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place. Current year Prior year b. Determine the times interest earned ratio for both years. Round to one decimal place. Current year Prior year c. The ratio of liabilities to stockholders' equity have and the times interest earned ratio has from the previous year. These results are the combined result of a…
The following information was drawn from the year-end balance sheets of Munoz River, Incorporated. Year 2 $675,000 213,000 Account Title Bonds payable Common stock Treasury stock Retained earnings Additional information regarding transactions occurring during Year 2: 1. Munoz River, Incorporated issued $49,800 of bonds during Year 2. The bonds were issued at face value. All bonds retired were retired at face value. 35,000 89,600 2. Common stock did not have a par value. 3. Munoz River, Incorporated uses the cost method to account for treasury stock. 4. The amount of net income shown on the Year 2 income statement was $35,100. Required a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash flows. b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of cash flows. c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2…
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The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $145,000 $226,000 Current maturities of serial bonds payable 310,000 310,000 Serial bonds payable, 10% 1,590,000 1,900,000 Common stock, $1 par value 80,000 110,000 Paid-in capital in excess of par 900,000 900,000 Retained earnings 3,110,000 2,470,000 The income before income tax was $456,000 and $399,000 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. Current Year: _________ Previous Year: ________ b. Determine the times interest earned ratio for both years. Round to one decimal place. Current Year: _________ Previous Year: ________ c. The ratio of liabilities to stockholders' equity has ______ (improved/deteriorated) and the times interest earned ratio has _______…

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