Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 14, Problem 9PEB
(a)
To determine
Calculate times-interest-earned ratio for the 2016 and the 2015.
(b)
To determine
Compare times-interest-earned ratio of the 2016 from the 2015.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please describe what is meant by “Times Interest Earned.” How is it calculated? Suppose you calculated this ratio for a company for two consecutive years and the results were the following:
year 2018 – 24.0 year 2017 – 28.0
Please interpret the results. What conclusions can you draw?
Calculate the times-interest-earned ratio for Smith & Sons, Inc., for 2015 and 2016. Round answers to two decimal places.
Loomis, Inc. reported the following on the company’s income statement in two recent years:
Please see the image for details:
a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.b. Is this ratio improving or declining?
Chapter 14 Solutions
Financial Accounting
Ch. 14 - Describe the two distinct obligations incurred by...Ch. 14 - Explain the meaning of each of the following terms...Ch. 14 - If you asked your broker to buy you a 12% bond...Ch. 14 - A corporation issues 26,000,000 of 9% bonds to...Ch. 14 - If bonds issued by a corporation are sold at a...Ch. 14 - Prob. 6DQCh. 14 - Bonds Payable has a balance of 5,000,000, and...Ch. 14 - What is a mortgage note?Ch. 14 - Fleeson Company needs additional funds to purchase...Ch. 14 - In what section of the balance sheet would a bond...
Ch. 14 - Prob. 1PEACh. 14 - Brower Co. is considering the following...Ch. 14 - On January 1, the first day of the fiscal year, a...Ch. 14 - On January 1, the first day of the fiscal year, a...Ch. 14 - On the first day of the fiscal year, a company...Ch. 14 - On the first day of the fiscal year, a company...Ch. 14 - Prob. 4PEACh. 14 - Prob. 4PEBCh. 14 - On the first day of the fiscal year, a company...Ch. 14 - On the first day of the fiscal year, a company...Ch. 14 - Prob. 6PEACh. 14 - Prob. 6PEBCh. 14 - A 1,500,000 bond issue on which there is an...Ch. 14 - A 500,000 bond issue on which there is an...Ch. 14 - On the first day of the fiscal year, a company...Ch. 14 - On the first day of the fiscal year, a company...Ch. 14 - Prob. 9PEACh. 14 - Prob. 9PEBCh. 14 - Prob. 1ECh. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - Prob. 4ECh. 14 - Prob. 5ECh. 14 - On the first day of its fiscal year, Pretender...Ch. 14 - Lerner Corporation wholesales repair products to...Ch. 14 - Prob. 8ECh. 14 - Emil Corp. produces and sells wind-energy-driven...Ch. 14 - On the first day of the fiscal year, Shiller...Ch. 14 - Prob. 11ECh. 14 - On January 1, 2016, Bryson Company obtained a...Ch. 14 - Prob. 13ECh. 14 - Prob. 14ECh. 14 - Prob. 15ECh. 14 - Prob. 16ECh. 14 - Tommy John is going to receive 1,000,000 in three...Ch. 14 - Prob. 18ECh. 14 - On January 1, 2016, you win 50,000,000 in the...Ch. 14 - Prob. 20ECh. 14 - Prob. 21ECh. 14 - Prob. 22ECh. 14 - Prob. 23ECh. 14 - Prob. 24ECh. 14 - Prob. 25ECh. 14 - Boyd Co. produces and sells aviation equipment. On...Ch. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Saverin Inc. produces and sells outdoor equipment....Ch. 14 - The following transactions were completed by...Ch. 14 - Prob. 5PACh. 14 - Saverin, Inc. produces and sells outdoor...Ch. 14 - Prob. 1PBCh. 14 - Prob. 2PBCh. 14 - Prob. 3PBCh. 14 - The following transactions were completed by...Ch. 14 - Prob. 5PBCh. 14 - Prob. 6PBCh. 14 - General Electric Capital, a division of General...Ch. 14 - Solar Industries develops and produces...Ch. 14 - Prob. 3CPCh. 14 - Xentec Inc. has decided to expand its operations...Ch. 14 - Prob. 5CPCh. 14 - The following financial data (in thousands) were...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Using the following select financial statement information from Black Water Industries, compute the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Black Water Industries?arrow_forwardCalculate each of following ratios for year 2017 using the financial statement in Table 1-3. Accounts receivable turnover Days sales outstanding (DSO) Accounts payable turnover Days payable outstanding (DPO) Total Asset turnover Fixed asset turnover Liquidity Ratio Current ratio Quick ratio Liability to assets Interest coverage ratio Profitability Ratios ROA ROE Gross profit margin Operating profit margin Net operating profit margin Table 1: Balance Sheet Statement for 2017 Cash $7,282 Short-Term invest. 20,000 Accounts Receivable 632,160 Inventories 1,287,360 Total Current Assets 1,946,802 Gross Property, Plant & Equipment 1,202,950 Less: Depreciation 263,160 Net Property, Plant & Equipment 939,790 Total assets $2,886,592 Accounts payable $324,000 Notes payable 720,000 Accruals 284,960 Total Current Liability 1,328,960 Long-term debt 1,000,000 Common stock 460,000 Retained earnings 97,632 Total equity 557,632 Total Liability & Equity $2,886,592 Table 2:…arrow_forwardComputing times-interest-earned ratio The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and Pennington Automotive: Requirements Compute the times-interest-earned ratio for each company Round to two decimals. Which company was better able to cover its interest expense?arrow_forward
- The formula for determining the rate earned on total assets is Net Income + Interest Expense/Average Total Assets. Assume that the Interest Expense for Shine, Inc. for the Year Ended December 31, 2011, is $25,000. Assume further that Income before Income Taxes is $395,000, Income Taxes is $150,000 and Net Income is $245,000. If the Average Total Assets for Shine, Inc. for the Year Ended December 31, 2011 is $909,000, what is the rate earned on total assets?arrow_forwardBy what percentage did Mydeco's revenues grow each year from 2016 to 2019? (Round to two decimalplaces.) By what percentage did net income grow each year? (Round to two decimalplaces.) Why might the growth rates of revenues and net income differ?arrow_forwardThe following data come from the financial records of Rundle Corporation for 2018: How many times was interest earned in 2018? Sales $ 845,000 Interest expense 5,800 Income tax expense 28,500 Net income 23,000arrow_forward
- The following information is taken Aiello Corporation's fiscal 2016 annual report. Selected Balance Sheet Data 2016 2015 Inventories........................ $221,418 $226,893 Accounts Receivable........... $121,333 $122,087 Assume that Aiello Corporation had $1,003,881 sales on credit during fiscal year 2016. What amount did the company collect from credit customers during the year? a. $1,003,881 b. $1,004,635 c. $1,003,127 d. $1,247,301arrow_forwardBy what percentage did Mydeco's revenues grow each year from 2016 to 2019? (Round to two decimal places.) By what percentage did net income grow each year? (Round to two decimal places.) Why might the growth rates of revenues and net income differ? (Round to two decimal places.)arrow_forwardUsing the Balance Sheets and Income Statement below, please calculate the following ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): Times interest earned ratio Cash coverage ratio SMOLIRA GOLD CORP.2014 and 2015 Balance Sheets Assets ($) Liabilities and Owners' Equity ($) 2014 2015 2014 2015 Current Assets Current Liabilities Cash 26,450 29,106 Accounts Payable 30,602 35,485 Accounts Receivable 13,693 18,282 Notes Payable 15,840 13,500 Inventory 27,931 32,586 Other 15,280 20,441 Total 68,074 79,974 Total 61,722 69,426 Long-term debt 95,000 110,000 Fixed Assets Owner's equity Net Plant and Equipment 357,165 398,346 Common stock and paid-in surplus 45,000 45,000 Accumulated retained earnings 223,517 253,893 Total 268,517 298,893 Total Assets…arrow_forward
- 1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover Ratioarrow_forwardCalculate the Current Ratio, Debt Ratio, Return on Assets (ROA) and Return on Equity (ROE). For the ROA and ROE, you should use the average total assets and the average total equity in your calculations. (The average is the total across two years divided by two). Calculate these values for each of 2011-2014. Interpret your calculations: what does this information mean? How is the company doing?arrow_forwardYou are given the following information about Sandhill Plumbing Company. Revenues in 2017 totaled $ 917, depreciation expenses $ 85, costs of goods sold $ 399, and interest expenses $ 62. At the end of the year, current assets were $ 150 and current liabilities were $ 111. The company has an average tax rate of 34 percent. Calculate its net income by setting up an income statement. (Round answers to 2 decimal places, e.g. 15.25) Sandhill Plumbing CompanyIncome Statementchoose the accounting period Amount select an income statement item $ enter a dollar amount select an income statement item enter a dollar amount select a summarizing line for the first part $ enter a total amount for the first part select an income statement item enter a dollar amount select a summarizing line for the second part $ enter a total amount for the second part select an income statement item enter a dollar amount select a summarizing line for the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Understanding Credit; Author: UCBStudentAffairs;https://www.youtube.com/watch?v=EBdXREhOuME;License: Standard Youtube License