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 $175,000 $274,000 Current maturities of serial bonds payable 360,000 360,000 Serial bonds payable, 10% 1,890,000 2,250,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,070,000 1,070,000 Retained earnings 3,690,000 2,930,000 The income before income tax expense was $832,500 and $728,400 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 fill in the blank 1 Prior 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 Prior year fill in the blank 4 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 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 Prior Year Accounts payable $175,000 $274,000 Current maturities of serial bonds payable 360,000 360,000 Serial bonds payable, 10% 1,890,000 2,250,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,070,000 1,070,000 Retained earnings 3,690,000 2,930,000 The income before income tax expense was $832,500 and $728,400 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 fill in the blank 1 Prior 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 Prior year fill in the blank 4 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 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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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 $175,000 $274,000 Current maturities of serial bonds payable 360,000 360,000 Serial bonds payable, 10% 1,890,000 2,250,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,070,000 1,070,000 Retained earnings 3,690,000 2,930,000 The income before income tax expense was $832,500 and $728,400 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 fill in the blank 1 Prior 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 Prior year fill in the blank 4 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
income before income taxes and
interest expense in the current year compared to the previous year.
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