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Monica [59]
3 years ago
5

Balance sheet and income statement data indicate the following: Bonds payable, 6% (due in 15 years) $1,200,000; preferred 8% sto

ck, $100 par (no change during the year) $200,000; common stock $50 par (no change during the year) $1,000,000; income before income tax for year $320,000; Income tax for year $80,000; common dividends paid $60,000; preferred dividends paid $16,000. Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)? Please show and explain steps.
Business
1 answer:
Sonbull [250]3 years ago
8 0

Answer:

Number of times bond interest charges were earned = 5.44

Explanation:

Given data,

Bond Interest Rate = 6%

Bond Amount = $1200000

Net Income before Income Tax = $320000

Bond Interest charges Earned :

= Bond Value × Interest Rate

= $1,200,000 × 6%

= $72,000

Net Income before Interest :

= Net Income Income Before Interest + Interest

= $320,000 + $72,000

= $392,000

Number of times bond interest charges were earned :

= Net Income before Interest and taxes ÷ Interest charges

= (392,000 ÷ 72,000 )

= 5.4444

Number of times bond interest charges were earned = 5.44

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Hammer would prevail against Kay based on:_______.

A. Unilateral contract.

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Hence  Hammer would prevail against Kay based on Unilateral contract.

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1 year ago
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Answer:

Small

Explanation:

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When a production process is capacity constrained, it implies that there is a factor that does not allow it to produce more output. Examples of such factors are minor bottlenecks, constrained designs and resources, and others.

A process is said to be efficient when it can avoid waste of resources in producing desired output.

Efficiency improvement therefore occurs when more output can be produced with less resources.

In the question, given that the process is currently capacity-constrained, efficiency improvement will result in producing more output at higher costs because of high variable costs despite that the process has low fixed costs.

As a result, the impact of an efficiency improvement will be small because producing more output will result in incurring higher cost due to high variable costs that change as quantity of output changes. That is, the impact of efficiency improvement will be small because high variable costs with low fixed cost will result in higher production cost.

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3 years ago
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3 years ago
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Answer:

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