Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned
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 | $340,000 | $101,000 | ||
Current maturities of serial bonds payable | 230,000 | 230,000 | ||
Serial bonds payable, 10% | 930,000 | 1,160,000 | ||
Common stock, $1 par value | 50,000 | 70,000 | ||
Paid-in capital in excess of par | 550,000 | 550,000 | ||
Retained earnings | 1,900,000 | 1,510,000 |
The income before income tax was $359,600 and $314,600 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 | |
Previous year |
b. Determine the times interest earned ratio for both years. Round to one decimal place.
Current year | |
Previous year |
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
a.
Ratio of Liabilities to Stockholders' Equity | |
Current Year | 0.6 |
Previous Year | 0.7 |
Ratio of Liabilities to Stockholders' Equity = ( Accounts Payable + Current Maturities of Serial Bonds Payable + Serial Bonds Payable ) / ( Common Stock + Paid-in Capital in Excess of Par + Retained Earnings )
b.
Times Interest Earned | |
Current Year | 4.1 times |
Previous Year | 3.3 times |
Times interest earned = EBIT / Interest Expense
EBIT = Income before Income Tax + Interest Expense.
Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned The following data were...
8. Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned 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 $150,000 $235,000 Current maturities of serial bonds payable 310,000 310,000 Serial bonds payable, 10% 1,630,000 1,940,000 Common stock, $1 par value 80,000 110,000 Paid-in capital in excess of par 920,000 920,000 Retained earnings 3,180,000 2,520,000 The income before income tax was $679,000...
Ratio of Liabilities to Stockholders' Equity and Times Interest Earned 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 $552,000 $162,000 370,000 370,000 Current maturities of serial bonds payable Serial bonds payable, 10% Common stock, $1 par value 1,520,000 1,890,000 80,000 100,000 Paid-in capital in excess of par 900,000 900,000 Retained earnings 3,090,000 2,460,000 The income before income tax was $774,900 and $678,000 for...
Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned 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 $204,000 $180,000 Current maturities of serial bonds payable 260,000 260,000 Serial bonds payable, 10% 1,300,000 1,560,000 Common stock, $1 par value 60,000 70,000 Paid-in capital in excess of par 650,000 650,000 Retained earnings 2,230,000 1,780,000 The income before income tax was $483,600 and...
Book Calculator Ratio of Liabilities to Stockholders' Equity and Times Interest Eamed 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 $196,000 $164,000 Current maturities of serial bonds payable 260,000 260,000 Serial bonds payable, 10% 1,260,000 1,520,000 Common stock, $1 par value 60,000 70,000 Pald-in capital in excess of par 630,000 630,000 Retained earnings 2,170,000 1,730,000 The income before income tax expense was $380,000...
eBook Calculator Ratio of abilities to Stockholders' Equity and Times Interest Eamed 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 $924,000 $800,000 Current maturities of serial bonds payable 200,000 200,000 Serial bonds payable, 10% 1,000,000 Common stock, $10 par value 250,000 250,000 Pald-in capital in excess of par 1,250,000 1,250,000 Retained earnings 860,000 500,000 The income before income tax was $480,000 and $420,000...
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