Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 13CE
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Iacouva Company reported the following on the company’s income statement for two recent years:

Please see  the attachment for details:

a. Determine the times interest earned ratio for the current year and the prior year. Round to one decimal place.
b. What conclusions can you draw?

 

Current Year
Prior Year
Interest expense
$5,000,000
$5,000,000
Income before income tax
3,500,000
6,000,000
Transcribed Image Text:Current Year Prior Year Interest expense $5,000,000 $5,000,000 Income before income tax 3,500,000 6,000,000
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