MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
11th Edition
ISBN: 9780133877502
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem P11.29APGA
Computing times-interest-earned ratio
The income statement for Utah Communications follows. Assume Utah Communications signed a 120-day, 12% $4,000 note on June 1, 2016, and that this was the only note payable for the company.
UTAH COMMUNICATIONS
Income Statement
Year Ended July 31- 2016
Sales Revenue $ 33.000
Less: Sales Returns and Allowances 5,100
Sales Discounts 2,900
Net Sales Revenue $ 25,000
Cost of Goods Sold 9,000
Gross Profit 16,000
Operating Expenses:
Selling Expenses 730
Administrative Expenses 1,500
Total Operating Expense 2,230
Operating Income 13,770
Other Revenues and (Expenses):
Interest Expense ?
Total Other Revenues and (Expenses) ?
Net Income before Income Tax Expense ?
Income Tax Expense 2,740
Net Income $ ?
Requirements
1. Fill in the missing information for Utah's year ended July 31, 2016, income statement.
2. Compute the times-interest-earned ratio for the company.
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Hint
Required:
Print
1. Compute the following turnover ratios.
2. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and
the average days to sell inventory.
ferences
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Compute the following turnover ratios. (Do not round intermediate calculations. Round your final answers to 1 decimal place.)
Receivables Turnover Ratio
Inventory Turnover Ratio
00
Chapter 11 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
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