The following data come from the financial records of Perez Corporation for Year 3: Sales. Interest expense Income tax expense Net income $840,000 5,200 26,000 28,500 Required How many times was interest earned in Year 3? (Round your answer to 2 decimal places.) Interest earned 6.48 times

The following data come from the financial records of Perez Corporation for Year 3: Sales. Interest expense Income tax expense Net income $840,000 5,200 26,000 28,500 Required How many times was interest earned in Year 3? (Round your answer to 2 decimal places.) Interest earned 6.48 times

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Made Answer

A: Given:Gross Sales =$1,130,000Cost of Goods Sold (COGS) =$532,000Selling Expenses =$222,000Notes…

Q: A company reports the following amounts at the end of the current year: Sales revenue Selling…

A: Permanent earnings are the portion of a company's income that is expected to continue in the future.…

Q: In a recent year, Land O’ Lakes, Inc., reported (in millions) Income from Operations of $206, Net…

A: Earnings before interest and taxes = Net income + Income tax expense + Interest expense…

Q: Norman Company's net income last year was $26,000. Changes in selected balance sheet accounts for…

A: Indirect method: Under indirect method, net income is reported first, then non-cash expenses, losses…

Q: . Great Products, Inc. reported the following on the company’s income statement in two recent years:…

A: Time Interest Earned Ratio: When a company's current revenue exceeds its debt commitments, the time…

Q: Question 1: Prepare an income statement from the data below using the multiple-step form: Brisky…

A: Income statement is an important part of accounting.Here all the income and expense are recorded and…

Q: In the past year, TVG had revenues of $3.03 million, cost of goods sold of $2.53 million, and…

A: TIME INTEREST EARNED RATIO Times Interest Earned Ratio is the Ratio Between Earning Before…

Q: Averill Products Inc., reported the following on the company's income statement in 20Y8 and 20Y9:…

A: The Time interest earned ratio compares the earnings before interest and tax with the interest…

Q: Ans

A: Step 1:a) and b)We have to calculate the net income and the operating cash flow. The formula of…

Q: Loomis, Inc., reported the following on the company’s income statement in two recent years:…

A: Times Interest earned Ratio Times interest earned ratio is the ratio which shows the ability of the…

Q: A company's interest expense is $8,000. Its income before interest expense and income taxes is…

Q: How do you make a company's financial statements for a year with expenditure as 25,000 and profit as…

A: The formula for calculating profits is as follows: Profit = Total revenue - expenditure

Q: Butler-Huron Company’s balance sheet and income statement for last year are as follows: Balance…

A: Working capital is very important for business and working capital depends on the cash conversion…

Q: In recent year Palestine Corporation had a net income of $12,500, interest expense of $2,500, and a…

A: Given: Net income = $12,500 Interest expense = $2,500 Times interest earned = 9

Q: The following are selected account balances of Rule Corporation at the end of the current year:…

A: INCOME STATEMENTIncome Statement is one of the Important Financial Statements of the Company. Income…

Q: Diane Corporation is preparing its year-end balance sheet. The company records show the following…

A: Current assets are those assets which are convertible into cash within one year from balance sheet…

Q: A company reports the following income statement and balance sheet information for the current year:…

A: Return on total assets: Return on total assets measures the company's ability to generate the…

Q: The Butler-Huron Company’s balance sheet and income statement for last year are as follows: Balance…

A: The cash conversion cycle is the method used by the management in determining the time to taken in…

Q: The formula for determining the number of times interest charges earned is Income before Income Tax…

A: The Times Interest Earned (TIE) Ratio is a financial metric that examines a company's capacity to…

Q: Assume Metro Corporation had a net income of $2,200 for the year ending December 31. Its beginning…

A: Net income = $2,200 Beginning assets = $35,500 Ending assets = $19,000

Q: Merryweather Corporation reported net income of $150,000, income before taxes of $240,000 and…

A: Times interest earned ratio is one of the ratio which shows income before interest and taxes with…

Q: Nanang Company's net income last year was $47,000. Changes in selected balance sheet accounts for…

A: Cash flows from operating activities: It is a section of Statement of cash flow that explains the…

Q: A company reports the following:Income before income tax $8,000,000Interest…

A: Times interest earned ratio: This financial metric gauges the company’s capability to pay the…

Q: Times Interest Earned Loomis, Inc., reported the following on the company's income statement in tvo…

A: Working: Current Year Prior Year Income before income tax expense $310,500,000 $432,000,000…

Q: Elizabeth Tailors Inc. has assets of $8,540,000 and turns over its assets 1.8 times per year. Return…

A: A sale is an agreement between a buyer and a seller in which a seller exchanges money in exchange…

Q: Income before income taxes Income tax expense Net income $356,883 107,065 $249,818 Interest expense…

A: Times interest earned ratio is one of the financial ratio which helps in measuring ability of the…

Q: A company’s income statement shows interest expense of $5 million, sales revenue of $50 million,…

A: Interest coverage ratio is used to find how easily a company can pay its interest on outstanding…

Q: In the recent year Sheridan Company had net income of $207400, interest expense of $54000, and tax…

A: The question is multiple choice question Required Choose the Correct Option.

Q: The Owner's Capital has a beginning balance of P626,000. The owner gave P130,000 additional…

A: The transactions recorded in the books are generally based on double entry system of accounting . As…

Q: 1. Helo Company has provided the following data: Sales, P5,000,000; Interest expense, P30,000; Total…

A: Net income When the revenues or incomes received by a company are higher than the expenses or…

Q: Branch Corp.'s total assets at the end of last year were $310,000 and its net income after taxes was…

A: The ratio analysis is performed to compare the different elements of the business. The return on…

Q: Balance Sheets December 31, Year 2 and Year 1 Year 2 Year 1 Assets Current assets: Cash Accounts…

A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…

Q: Helo Company has provided the following data: Sales, P5,000,000; Interest expense, P30,000; Total…

A: Net income When the revenues or incomes earned by an entity are higher than the expenses or charges…

Q: Times Interest Earned Sprout Company reported the following on the company's income statement in two…

A: Times interest earned ratio shows ability of the business in meeting debt obligations with the help…

Q: A company reports the following income statement and balance sheet information for the current year:…

A: The return on total assets is the used by the company to measure the earning capability in…

Q: 3-If the following financial information related to XYZ Company. Total Revenues last year $870,…

A: Particulars Amount Revenue 870 Less : Cost of Good Sold 350 Gross Profit 520 Less :…

Q: Pharoah Company reports the following information (in millions) during a recent year: net sales,…

A: Step 1: Given, Net sales = $13,875.0,Net earnings = $693.8,Total assets(ending) = $5,600.0, and…

Q: A firm has net income before interest and taxes of $ 193,000 and interest expense of $28, 100. What…

A: Times interest earned ratio is an important financial ratio. Financial ratios are based on the…

Q: he following information is from Atlanta Corp. for the 12 months ended December 31. Sales revenue…

A: Multi Step Income Statement: It refers to the income statement prepared by the business which…

Q: Save Mart had income before interest expense and income taxes of 12, $508 million and interest…

A: The objective of the question is to calculate the times interest earned for both Save Mart and Value…

Q: A company reports the following:Income before income tax $4,000,000Interest expense…

A: Times interest earned ratio quantifies the number of times the earnings before interest and taxes…

Q: Thrasher Company reported income before taxes of $180,000. The company is in a 30% income tax…

A: Times interest earned ratio = Earnings before interest and tax / Interest expense Earnings before…

Question

The following data come from the financial records of Perez Corporation for Year 3:
Sales
Interest expense
Income tax expense
Net income
$840,000
5,200
26,000
28,500
Required
How many times was interest earned in Year 3? (Round your answer to 2 decimal places.)
Interest earned
6.48 times

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Ratio Analysis is explained as follows -

VIEW

Step 2: Computation of Times interest Earned Ratio -

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

imes interest earned Berry Company reported the following on the company's income statement in two recent years: Current Year Prior Year Interest expense $241,000 $289,200 Income before income tax expense 2,988,400 3,354,720 a. Determine the number of times interest charges were earned for current Year and prior Year. Round to one decimal place. Current Year Prior Year b. Is the number of times interest charges are earned improving or declining?
The following information is available for Tamarisk Corp. for the year ended December 31, 2022. Other revenues and gains $23,800 Other expenses and losses 4,000 Cost of goods sold 292,000 Sales discounts 4,600 Sales revenue 760,000 Operating expenses 221,000 Sales returns and allowances 10,800 Prepare a multiple-step income statement for Tamarisk Corp. The company has a tax rate of 25%.
The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% Total liabilities. Stockholders equity Connon stock, $5 per value. Retained earnings Total stockholders equity Total liabilities and stockholders' equity Castile Products, Incorporated Income Statement For the Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net incone before taxes Income taxes (30%) Net income $24,000 230,000 370,000 9,000 633,000 860,000 $1,493,000 $ 290,000 320,000 610,000 $150,000. 733,000 883,000 $1,493,000 $ 2,290,000 1,220,000 1,070,000 580,000 490,000 32,000 458,000 137,400 $ 320,600
Please answer this question.
May I ask for an explanation and solution to the question for a better understanding. Thank you! The times interest earned ratio is: a. 2.8 to 1 b. 4.8 to 1 c. 8.0 to 1 d. 9.0 to 1
The Lancaster Corporation's income statement is given below. Sales Cost of goods sold Gross profit Fixed charges (other than interest) Income before interest and taxes Interest Income before taxes Taxes (35%) Income after taxes LANCASTER CORPORATION a. What is the times-interest-earned ratio? Note: Round your answer to 2 decimal places. Times interest earned Fixed charge coverage times b. What would be the fixed-charge-coverage ratio? Note: Round your answer to 2 decimal places. times $ 223,000 155,000 $ 68,000 33,100 $ 34,900 13,400 $ 21,500 7,525 $ 13,975
In a recent year Ley Corporation had net income of $150,000, interest expense of $30,000, and a times interest earned ratio of 7. What was Ley Corporation's income before taxes for the year?
Times interest earned A company reports the following: Income before income tax expense $1,271,600 Interest expense 187,000 Determine the times interest earned ratio. If required, round the answer to one decimal place.
A company's income before interest expense and income taxes is $425,000, and its interest expense is $115,000. Its times interest earned ratio is: Multiple Choice 7.40 0.27 343 2.43 3.70
Want Answer
Save Mart had income before interest expense and income taxes of 12, $508 million and interest expense of 1000 $60 million value land had income before interest expense and income taxes of 3000 $534 million and interest expense of 1000 $140 million calculate the times interest earned for each company and comment on the results
Here and Gone, Inc., has sales of $23,759,991, total assets of $11,706,728, and total debt of $4,779,099. If the profit margin is 6 percent, what is ROA? Enter the answer with 4 decimal places (e.g. 0.1234).