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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: Current Previous Year Year Accounts payable $464,000 $220,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 1,830,000 2,240,000 Common stock, $1 par value 70,000 80,000 Paid-in capital in excess of par 740,000 750,000 Retained earnings 2,570,000 2,040,000 The income before income tax expense was $806,400 and $705,600 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 year 0.8 V Previous year 1 b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous VARE 4.15 X

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 Previous Year Year Accounts payable $464,000 $220,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 1,830,000 2,240,000 Common stock, $1 par value 70,000 80,000 Paid-in capital in excess of par 740,000 750,000 Retained earnings 2,570,000 2,040,000 The income before income tax expense was $806,400 and $705,600 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 year 0.8 V Previous year 1 b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous VARE 4.15 X

FINANCIAL ACCOUNTING
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: Current Previous Year Year Accounts payable $464,000 $220,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 1,830,000 2,240,000 Common stock, $1 par value 70,000 80,000 Paid-in capital in excess of par 740,000 750,000 Retained earnings 2,570,000 2,040,000 The income before income tax expense was $806,400 and $705,600 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 year Previous year 0.8 1 b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous year 4.15 X 0.4 X
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 Previous Year Year Accounts payable $464,000 $220,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 1,830,000 2,240,000 Common stock, $1 par value 70,000 80,000 Paid-in capital in excess of par 740,000 750,000 Retained earnings 2,570,000 2,040,000 The income before income tax expense was $806,400 and $705,600 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 year Previous year 0.8 1 b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous year 4.15 X 0.4 X
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