Milton, Inc. provides the following income statement for 2019: Net Sales $240,000 Cost of Goods Sold...
Milton, Inc. provides the following income statement for 2019: Net Sales $240,000 Cost of Goods Sold 110,000 Gross Profit $130,000 Operating Expenses: Selling Expenses 45,000 Administrative Expenses 12,000 Total Operating Expenses 57,000 Operating Income $73,000 Other Income and (Expenses): Loss on Sale of Capital Assets (25,000) Interest Expense (1,000) Total Other Income and (Expenses) (26,000) Income Before Income Taxes $47,000 Income Tax Expense 5,000 Net Income $42,000 Calculate the times-interest-earned ratio. (Round your answer to two decimal places.)
A.
73.00 times
B.
48.00 times
C.
42.00 times
D.
47.00 times
2
The financial statements of Trenton Office Supply include the following items:
|
2019 |
2018 |
|
|
Cash |
$47,500 |
$49,000 |
|
Short-term Investments |
24,000 |
14,000 |
|
Net Accounts Receivable |
102,000 |
100,000 |
|
Merchandise Inventory |
127,000 |
126,000 |
|
Total Assets |
525,000 |
546,000 |
|
Total Current Liabilities |
253,000 |
238,000 |
|
Long-term Note Payable |
55,000 |
50,000 |
What is the 2019 current ratio? (Round your answer to two decimal places.)
A.
0.57
B.
1.70
C.
1.19
D.
0.84
Homework Answers
Answer- Times interest earned ratio= Income before Interest & Taxes(EBIT)/Interest expenses
= ($42000+$1000+$5000)/$1000
= $48000/$1000
= 48.00 times
Answer- Current Ratio for 2019= 1.19 times
Explanation- Current Ratio for 2019 = Current Assets/Current liabilities
=(Cash+ Short term investments+ Net Accounts receivable+ Merchandise Inventory+)/ Current liabilities
= ($47500+$24000+$102000+$127000)/$253000
= $300500/$253000
= 1.19 times
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Milton, Inc. provides the following income statement for 2019:
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