Balance sheet and income statement data indicate the following:Bonds payable, 6% (this is Year 4 of 20 years)$1,200,000Preferred 8% stock, $100 par (no change during the year)200,000Common stock, $50 par (no change during the year)1,000,000Income before income tax for year340,000Income tax for year80,000Common dividends paid60,000Preferred dividends paid16,000Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?

Ratio analysis helps to measure the companies performance and decision-making. The time interest…

Answered: Balance sheet and income statement data…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 20EA: Longmont Corporation earned net income of $90,000 this year. The company began the year with 600...

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Balance sheet and income statement data indicate the following:

Bonds payable, 6% (this is Year 4 of 20 years)	$1,200,000
Preferred 8% stock, $100 par
(no change during the year)	200,000
Common stock, $50 par
(no change during the year)	1,000,000
Income before income tax for year	340,000
Income tax for year	80,000
Common dividends paid	60,000
Preferred dividends paid	16,000

Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?

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