Question

Calculate Times- interest- earned ratio, show work

All Is Not Paradise in Eden's Garden: Part 1 Joe and Kaitlin Eden, co-owners of Eden's Garden, a small nurs- Income Statement, Eden's Garden ery, lawn, and garden supply business, have just received their Net Sales Revenue $689,247 Balance Sheet, Eden's Garden Cost of Goods Sold Assets Beginning Inventory, 1/1/x $78,271 $403,569 Current Assets +Purchases Cash Goods available for Sale $6,457 $481,840 $86,157 Accounts Receivable Ending Inventory, 12,31x $29,152 Less Allowance for Doubtful Accounts Cost of Goods Sold $3,200 $25,952 $395,683 Grass Profit $293,564 Inventory Supplies Prepaid Expenses $88,157 Operating Expenses $7,514 Advertising $22,150 $1,856 Insurance $9,187 Total Current Assets $129,936 Depreciation Fixed Assets Building $26,705 Land Autos $7,895 $59,150 Buildings Less Accumulated Depreciation Equipment Salaries $51,027 $2,061 $11,200 $116,541 $48,966 Uniforms Autos $24,671 $4,018 Less Accumulated Depreciation Equipment Less Accumulated Depreciation Repairs and Maintenance $12,300 $9,097 $2,658 $2,798 $12,371 Travel Entertainment $22,375 $1,250 $21,125 Total Operating Expenses $212,249 Funiture and Fixtures $10,295 General Expenses Less Accumulated Depreciation Total Fixed Asse ts $1,000 $9,295 $150,907 Utilities $7,987 Telephone Professional Fees $2,753 Intangibles (Goodwill) S0 $3,000 Total Assets $280,843 Postage $1,892 $11,589 Liabilities Рayroll Taxes Current Liabilities Total General Expenses $27,221 Accounts Payable Notes Payable Credit Line Payable Accrued Wages/Sal aries Payable Accrued Interest Payable Accrued Taxes Paya ble $54,258 Other Expenses $20,150 Interest Expense $21,978 $8,118 Bad check Expense 5679 $1,344 Miscellaneous expense $1,248 $1,785 Total Other Expenses $23,905 $1,967 Total Current Liabilities Total Expenses $87,622 $263,375 Net Income Long-Term Liabilities $30,189 Mortgage Note Payable Credit sales represented $289,484 of this total. $72,846 $47,000 $119,846 Total Long-Term Liabilities Owner's Equity year-end financial statements from their accountant. At their last meeting with their accountant, Shelley Edison, three months ago, the Edens had mentioned that they seemed to be having trouble paying their bills on time. "Some of our suppliers have threatened Sam Lloyd, Capital $73,375 Total Liabilities and Owner's Equity $280,843 to put us on 'credit hold," said Jce.

Answer 1

Times- interest- earned ratio = EBIT/interest expense

EBIT = EARNINGS BEFORE INTEREST AND TAX.
= Net income + interest expense+ tax expense.
= 30,189+21,978+0
= 52,167

interest expense= 21,978

Times- interest- earned ratio = 52167/21978
= 2.37