Times Interest Earned: The ratio which measures a company’s ability to pay its obligation is called a times interest earned. It is computed by dividing the net income before interest and taxes by the interest expense of the company. To determine : 1. Compute times interest earned of Apple for the year ended 2013, 2012, and 2011. 2. Determine whether the “Loyalty reward liabilities” is known or estimated”. Explain how this liability is created. 3. Identification of total of accrued expenses and search its footnote to list the six accounts that make up accrued expenses. 4. Compute its times interest earned for years ending after September 28, 2013 and compare the results with part 1.

Question

Want to see the full answer?

Answer 1

Question

Chapter 11, Problem 1BTN

To determine

Times Interest Earned:

The ratio which measures a company’s ability to pay its obligation is called a times interest earned. It is computed by dividing the net income before interest and taxes by the interest expense of the company.

To determine:

1. Compute times interest earned of Apple for the year ended 2013, 2012, and 2011.

2. Determine whether the “Loyalty reward liabilities” is known or estimated”. Explain how this liability is created.

3. Identification of total of accrued expenses and search its footnote to list the six accounts that make up accrued expenses.

4. Compute its times interest earned for years ending after September 28, 2013 and compare the results with part 1.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

Brar Incorporated supplied the following financial information for analysis: Depreciable assets (purchased at the beginning of year 1) $ 4,500,000 Profits before depreciation (all in cash flows at end of year): Year 1 960,000 Year 2 1,400,000 Year 3 2,100,000 Replacement cost of depreciable assets at end of: Year 1 $ 5,000,000 Year 2 6,200,000 Year 3 7,600,000 The assets are depreciated at a rate of 12% per year and have no salvage value. What is the ROI for year 2 using historical cost, net book value? Multiple Choice 26.60% 24.72% 25.15% 22.64% None of these.

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $27 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is operating at full capacity and can sell all of the chemical that it can produce, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $6.00 per ounce $21.00 per ounce $15.00 per ounce $27.00 per ounce