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.
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
ACCOUNTING PRINCIPLES 122 5/16 >C<
- Financial Accountarrow_forwardDo fast this question answer general accountingarrow_forwardA company has received a loan from a bank with certain debt covenants that require the company to maintain specific financial ratios. Discuss the potential impact of these covenants on the company's financial statements and the steps the company can take to ensure compliance. What are the consequences of violating debt covenants? How can the company negotiate with the bank to modify the covenants if necessary?arrow_forward
- Don't want AI ANSWERarrow_forwardWhat is the opereting cash flow at this lavel of output?arrow_forwardDuring March, the production department of a process operations system completed and transferred finished goods 21,000 units that were in process at the beginning of March and 210,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 65% complete with respect to conversion. At the end of March. 40,000 additional units were in process in the production department and were 100% complete with respect to materials and 40% complete with respect to conversion. Compute the number of physical units transferred to finished goods. a. 205,000 b. 271,000 c. 254,000 d. 231,000 e. 210,000arrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning