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Assoli18 [71]
3 years ago
9

The following information was available for the year ended December 31, 2019: Earnings before interest and taxes (operating inco

me) $ 75,000 Interest expense 15,000 Income tax expense 20,000 Net income 40,000 Total assets at year-end 250,000 Total liabilities at year-end 140,000 Required: Calculate the debt ratio at December 31, 2019. (Round your answer to 1 decimal place.) Calculate the debt/equity ratio at December 31, 2019. (Round your answer to 2 decimal places.) Calculate the times interest earned for the year ended December 31, 2019. (Round your answer to 2 decimal places.)
Business
1 answer:
Charra [1.4K]3 years ago
6 0

Answer:

Debt ratio = 56%

Times Interest earned = 5 times

Explanation:

<em>The debt ratio is the proportion of the total assets amount that is financed by debt . It is a measure of financial risk. A company with a high debt ratio (in excess of 50%) is considered financially risky. That is may not be able to meet its short term financial obligations</em>

Debt ratio = Debt/Total assets × 100

              = (140,000/250,000)× 100

              = 56%

Times interest earned is the number of times the earning before interest and taxes (EBIT) can pay the interest obligation. It is a measure of financial risk. For example, a company with a ratio of less than 3 times might be considered as potentially unable to meets its loan obligation

Times interest earned = Earnings before interest and tax (EBIT)/Interest expense

= 75,000/15,000

= 5 times.

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When the economy is operating at point C, the Federal Reserve may decrease the discount rate to
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Answer:

D ; increase growth

Explanation:

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Can someone sell a car that is not registered to their name
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3 years ago
Hale Company sells merchandise on account for $1,000 to Long Company with credit terms of 2/10, n/30. Long Company returns $200
Vladimir79 [104]

Answer:

Amount of Check = $784

so correct option is a. $784

Explanation:

given data

Merchandise on account = $1,000

Long Company returns  = $200

credit terms =  2/10

n/30

to find out

What is the amount of the check

solution

we know here that Total Merchandise will be

Total Merchandise = Merchandise on account  - returns   ....................1

Total Merchandise = $1000 - $200

Total Merchandise = $800

and

discount will be here

Discount = 0.02  ×  800

returns = $16

so

Amount of Check will be as

Amount of Check = Total Merchandise - Discount   ...................2

put here value

Amount of Check = Total Merchandise - Discount  

Amount of Check = $800 - $16

Amount of Check = $784

so correct option is a. $784

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Please attached sheet for computation.

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