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Murrr4er [49]
3 years ago
10

Sales are $1.44 million, cost of goods sold is $570,000, depreciation expense is $144,000, other operating expenses is $294,000,

addition to retained earnings is $133,100, dividends per share is $1, tax rate is 35 percent, and number of shares of common stock outstanding is 84,000. LaTonya’s Flop Shops has no preferred stock outstanding. Calculate the times interest earned ratio for LaTonya’s Flop Shops, Inc.,
Business
1 answer:
anygoal [31]3 years ago
4 0

Answer:

Times Interest earned ratio is 4.41 times

Explanation:

Times interest earned ratio measure the business capability to pay the interest over its liabilities from its current earning.

As interest expense value is not given it is calculated by the net of Earning before interest and tax and Income before tax

Net Income = Addition to Retained Earning + Dividend Paid = $133,100 + ( 84,000 x $1 ) = $133,100 + $84,000 = $217,100

Income before tax = $217,100 x 100% / ( 100% - 35%) = $334,000

Earning before interest and tax = Sales - Cost of goods sold - depreciation expense - other operating expenses = 1,440,000 - 570,000 - 144,000 - 294,000 = $432,000

Interest Expense = Earning before interest and tax - Income before tax = $432,000 - 334,000 = $98,000

Times Interest earned ratio = Earning before Interest and tax /  Interest expense = $432,000 / $98000 = 4.41 time

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Explanation:

An organization that is global within two years of its inception with a major focus on foreign markets rather than its domestic market can be said to be born global.

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An investor company owns 30% of the common stock of an investee company. The investor has significant influence over the investe
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Answer:

Income for investee during the year ended December 31th 2019: $ 17,200

Explanation:

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Equity proportion: 1,500,000  30% =    (450,000)

                           Goodwill                         75,000

Transactions during the year:

income 60,000 x 30% =  18,000

dividends 15,000 x 30% = (4,500)

unrealized profit 2018:

30,000 = cost (1.25)

30,000 / 1.25 = 24,000

gross profit 6,000

unrealized gain: 6,000 x 30% = (1,800)

unrealized profit 2019:

40,000 = cost (1.25)

40,000/1.25 = cost

cost = 32,000

gross profit: 40,000 - 32,000 = 8,000

proportion of unrealized gain:

                   8,000 x 30% =      (2,400)

profit for 2018 realized              1,800

                    net adjustment        600

<u></u>

<u>income from investee:</u>

18,000 - 600 (net unrealized gain) = 17,200

6 0
3 years ago
1. A metal box of weigh 20 N rests on its 1 m by 0.6m side on floor. How
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Use what you have learned about demand to answer the question. Based on the law of demand, when the price of a specific good dec
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Answer:

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Explanation:

According to the law of supply and demand, when the price of an specific good or service decreases, the quantity demanded for that good or service will increase.

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Answer:

Hamlet

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Explanation:

a) Data and Calculations:

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b) Hamlet can use the capital loss deduction of $1,500 to reduce his other capital gains of the similar term in the first instance.  Note that the capital loss is a long-term capital loss since the investment was held for two years.

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