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 $436,000 $210,000 Current maturities of serial bonds payable 390,000 390,000 Serial bonds payable, 10% 1,750,000 2,140,000 Common stock, $1 par value 60,000 80,000 Paid-in capital in excess of par 710,000 710,000 Retained earnings 2,450,000 1,950,000
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 | $436,000 | $210,000 | ||
| Current maturities of serial bonds payable | 390,000 | 390,000 | ||
| Serial bonds payable, 10% | 1,750,000 | 2,140,000 | ||
| Common stock, $1 par value | 60,000 | 80,000 | ||
| Paid-in capital in excess of par | 710,000 | 710,000 | ||
| 2,450,000 | 1,950,000 |
The income before income tax expense was $706,200 and $617,900 for the current and previous years, respectively.
a. Determine the ratio of liabilities to
| 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 |
c. The ratio of liabilities to stockholders' equity has
and the number of times bond interest charges were earned has
from the previous year. These results are the combined result of a
income before income taxes and
interest expense in the current year compared to the previous year.
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