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 $440,000 $164,000 Current maturities of serial bonds payable 320,000 320,000 Serial bonds payable, 10% 1,380,000 1,700,000 Common stock, $1 par value 90,000 110,000 Paid-in capital in excess of par 940,000 950,000 Retained earnings 3,250,000 2,580,000 The income before income tax expense was $663,000 and $580,100 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 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.
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 $440,000 $164,000 Current maturities of serial bonds payable 320,000 320,000 Serial bonds payable, 10% 1,380,000 1,700,000 Common stock, $1 par value 90,000 110,000 Paid-in capital in excess of par 940,000 950,000 Retained earnings 3,250,000 2,580,000 The income before income tax expense was $663,000 and $580,100 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 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
Current
YearPrevious
YearAccounts payable $440,000 $164,000 Current maturities of serial bonds payable 320,000 320,000 Serial bonds payable, 10% 1,380,000 1,700,000 Common stock, $1 par value 90,000 110,000 Paid-in capital in excess of par 940,000 950,000 Retained earnings 3,250,000 2,580,000 The income before income tax expense was $663,000 and $580,100 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 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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