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3 years ago

Using the income statement for Times Mirror and Glass Co., compute the following ratios:

Business

1 answer:

Umnica [9.8K]3 years ago

8 0

Answer:

(A) Interest coverage charge ratio= 6.21

(B) Fixed charge coverage = 2.84

(D) Total assets turnover= 1.55

(E) Return on assets= 13.26%

Explanation:

(A) The Interest coverage charge ratio can be calculated as follows= EBIT/Interest expense

= 45,300/7,300

= 6.21

(B) The fixed charge coverage can be calculated as follows

= income before fixed charge + interest/fixed charges + interest

= 45,300+13,300/7,300+13,300

= 58,600/20,600

= 2.84

= Net income/sales × 100

= 22,800/266,000 × 100

=0.0857 × 100

= 8.57%

(D) The total assets turnover can be calculated as follows

= Sales/total assets

= 266,000/172,000

= 1.55

(E) The return on assets can be calculated as follows

= Net income/Total assets × 100

= 22,800/172,000 × 100

= 0.13255×100

= 13.26%

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2 years ago

Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60. If the customer pays within the discount period, what amount

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Answer:

The amount that will be reported on the income statement as net sales is $2,940 and as gross profit is $940.

Explanation:

Given:

Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60.

If the customer pays within the discount period.

Now, to find the amount reported on the income statement as net sales and as gross profit.

Cost of merchandise = $2,000.

As, merchandise sold for $3,000.

So, to get the net sales we deduct the discount:

Merchandise on terms 2/30, n/60.

$3,000-2\%\ of\ 3000\\\\=3,000-\frac{2}{100}\times 3000\\\\=3,000-0.02\times 3000\\\\=3,000-60\\\\=\$2,940.$

Thus, the net sales is $2,940.

Now, to get the gross profit we subtract cost of merchandise from net sales:

$\$2,940-\$2,000\\\\=\$940.$

Hence, gross profit is $940.

Therefore, the amount that will be reported on the income statement as net sales is $2,940 and as gross profit is $940.

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3 years ago

The United Nations Human Development Report gives the following data for real GDP per person in 2014: China, $12,547; Russia,

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Answer:

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Explanation:

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3 years ago

Grason Corporation is preparing a budgeted balance sheet for 2018. The retained earnings balance at December 31, 2017 was $533,5

olga nikolaevna [1]

Answer:

D. $605,500

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