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atroni [7]
3 years ago
8

A company's income before interest expense and income taxes is $575,000 and its interest expense is $145,000. Its times interest

earned ratio is:__________.a. 0.25 b. 2.73 c. 0.99 d. 3.72
Business
1 answer:
34kurt3 years ago
4 0

Answer:

3.96

Explanation:

A company's Time Interest Earned ratio shows us its ability to pay its debts.

The income before expenses is given as: $575000

The interest expenses = $145000

The question wants us to find time interest earned ratio. We get this by:

Company's initial income/interest expenses

= $575,000/$145,000

= 3.96

This is the correct answer to the question. The right answer was not listed in the options.

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A company receives a 10%, 90-day note for $2,700. The total interest due on the maturity date is: (Use 360 days a year.)
Rom4ik [11]

Answer:

Interest amount = $67.5

Explanation:

Use the below formula to find the interest amount:

Interest amount = The value of note x Interest rate x (90 / 360)

Given value of note = $2700

Interest rate = 10%

Time = 90/360

Now plug the value in the above formula and solve for the interest due:

Interest amount = The value of note x Interest rate x (90 / 360)

Interest amount = 2700 x 10% x (90 / 360)

Interest amount = $67.5

8 0
2 years ago
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $240,000 of 10-year, 9
34kurt

Answer:

Thomson Co.

Journal entries:

May 1:

Debit Cash Account $240,000

Credit Bonds Payable $240,000

To record the issue of 10-year, 9% bonds at face value.

Nov. 9:

Debit Interest on Bonds $10,800

Credit Cash Account $10800

To record the payment of 6-months interest.

Dec. 31:

Debit Interest on Bonds $3,600

Credit Interest on Bonds Payable $3,600

To record two-months interest accrued.

Explanation:

The journal entries made by Thomson Co. are to record the bond transactions.  For example, when the bonds were issued, cash was received.  This transaction gives rise to a debit to the Cash Account that received the value and a credit to the Bonds Payable Account that gave the value.  The bonds payable account represents the liability that is contracted by the bonds issue.  Recording these transactions in the journal show their effects on the accounting equation that requires assets to be equal to liabilities and owner's' equity following each transaction.

5 0
3 years ago
Other things the same, during recessions taxes tend to Select one: a. rise. The rise in taxes contracts aggregate demand. b. fal
Hunter-Best [27]

Answer:

The correct answer is letter "C": fall. The fall in taxes stimulates aggregate demand.

Explanation:

Recessions are the economic phases characterized by a decrease in economic growth. Unemployment rises, real income decreases, and the overall economy of a country dwindles. However, the government intervenes to turn around the situation by establishing fiscal policies.

<em>In such scenarios the tax rate decreases for individuals and institutions to have more money available so their purchasing power increases which, eventually, increases the aggregate demand (total demand for finished products).</em>

6 0
3 years ago
Andrea has prepared the following list of statements about corporations. Identify whether each statement is true or false.
Afina-wow [57]

Answer:

1.True

2.True

3.True

4.False

5.True

6.False

7.False

8.True

9.Treu

10.False

5 0
3 years ago
The amount by which government expenditures exceed revenues during a particular year is the:A. public debt.B. budget deficit.C.
slava [35]

Answer:

The correct answer is

B. budget deficit

good luck

4 0
3 years ago
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