Ratio of liabilities to stockholders' equity and times interest earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $318,000 $272,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 2,020,000 2,430,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,010,000 1,010,000 Retained earnings 3,480,000 2,760,000 The income before income tax expense was $631,800 and $552,800 for the current and previous years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round your answers to one decimal place. Current year Previous year b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous year c. The ratio of liabilities to stockholders' equity has and the number of times bond interest charges were earned has from the previous year. These results are the combined result of a income before income taxes and interest expense in the current year compared to the previous year.

Ratio of liabilities to stockholders' equity and times interest earned The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: Current Year Previous Year Accounts payable $318,000 $272,000 Current maturities of serial bonds payable 410,000 410,000 Serial bonds payable, 10% 2,020,000 2,430,000 Common stock, $1 par value 90,000 120,000 Paid-in capital in excess of par 1,010,000 1,010,000 Retained earnings 3,480,000 2,760,000 The income before income tax expense was $631,800 and $552,800 for the current and previous years, respectively. a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round your answers to one decimal place. Current year Previous year b. Determine the times interest earned ratio for both years. Round your answers to one decimal place. Current year Previous year c. The ratio of liabilities to stockholders' equity has and the number of times bond interest charges were earned has from the previous year. These results are the combined result of a income before income taxes and interest expense in the current year compared to the previous year.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 13E: Ratio of liabilities to stockholders equity and times interest earned The following data were taken...

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