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charle [14.2K]
2 years ago
10

Balance sheet and income statement data indicate the following: Bonds payable, 10% $1,000,000 Preferred 5% stock, $100 par (no c

hange during the year 300,000 Common stock, $50 par (no change during the year 2,000,000 Income before income tax for year 350,000 Income tax for year 80,000 Common dividends paid 50,000 Preferred dividends paid 15,000 Based on the data presented above, what is the number of time bond interest charges were earned (round to one decimal point)
Business
1 answer:
dangina [55]2 years ago
7 0

Answer:

The Time interest earned ratio is 4.5

Explanation:

Given:

Bonds payable 10% in 2 years                                                   $1000000

Preferred 5% stock $100 par (no change during the year)      300000

Common stock, $50 par (no change during the year)             2000000

Income before income tax for year                                            350000

Income tax for year                                                                     80000

Common dividends paid                                                             50000

Preferred dividends paid                                                             15000

Time interest earned ratio is a measure of how a company is able to pay up its debts based on its income. It is the ratio of earnings before tax and interest to total interest expense.

Interest expense = $1000000 × 10% = $100000 × 0.1 = $100000

Therefore the earnings before tax and interest = Income before income tax for year + Interest expense = $350000 + $100000 = $450000

the earnings before tax and interest = $450000

Time interest earned ratio = earnings before tax and interest / Interest expense  = $450000 / $100000 = 4.5

The Time interest earned ratio =  4.5

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During the current period, Roberts recognized interest expense of $9,400 and paid interest of $9,000 related to its discounted b
VARVARA [1.3K]

Answer:

amortization on discount on BP 400

Explanation:

When there is a difference between the face value and the issuance proceeds from the bond a premium or discount is created.

When the proceeds are above, there will be a premium and the interest expense will be lower thant the actual cash outlay on the bond.

When theface value is above the proceeds, there is a discount.and expenses are higher than cash payment to bondholders.

In this case the expense is higher so there is a discount.

6 0
3 years ago
Molly's auto detailers maintains its records on the cash basis. During 2018, molly's collected $72,800 from customers and paid $
igor_vitrenko [27]

Accrued Net Income will be calculated as below:

Sales                                                    $72800

Less Expenses                                     $20400

Cash Income                                         $52400

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Less: Reduction in Prepaid Exp             $1900

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Depreciation will be reduced as its an expense and all expenses will be reduced.

Increase in Accounts Recievables indicate there have been sales which have not been paid for yet, thus sales will increase and this needs to be added

Reduction in Prepaid Expenses refer to expenses being paid off earlier but now need to be recognised, thus these need to be added to expenses

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6 0
2 years ago
______ effect happens when the place a product was manufactured influences how consumers perceive the product.
stiks02 [169]

Effect happens when the place a product was manufactured influences how consumers perceive the product.  Country of Origin

What benefits do consumer product firms derive by marketing internationally?

Competition with other companies can be maintained. Sales and profits can be enhanced. Life cycles of products can be extended.

Country of origin:

Country of origin represents the country or countries of manufacture, production, design, or brand origin where an article or product comes from. For multinational brands, CO may include multiple countries within the value-creation process.

Learn more about country of origin:

brainly.com/question/19048062

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8 0
1 year ago
Cross Country Movers has just gone public. Under a firm commitment agreement, the firm received $19.84 for each of the 2.12 mill
nikitadnepr [17]

Answer:

= $11,670,200/ $41,329,800 x 100 = 28.24%

Explanation:

The question is to compute the flotation cost of the funds raised by Cross Country Movers after going public. Furthermore, it should be presented as a percentage.

The formula therefore, is = Total Direct Costs / Net Amount raised x 100

Step 1: Total Direct Costs

= Direct Costs (legal and others) + Indirect costs + (Initial Offering Price - the amount received for each share x total shares sold) + (Price rise in stock per share - the initial offering price per share x total shares sold)

= $626,000 + $105,000 + 9,667,200‬+ 1,272,000‬ = $11,670,200

Step 2: Net Amount Raised

= Amount recieved per share x total shares - Direct and indirect costs

= $19.84 x 2,120,000 shares - $626,000 + $105,000

= 42,060,800‬- 731,000‬ = $41,329,800

Step 3: Floatation Cost in Percentage

= $11,670,200/ $41,329,800 x 100 = 28.24%

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In which of the following stages of personal selling does a salesperson tell the product story to the buyer?
dimulka [17.4K]

Answer:

C) presentation

Explanation:

During presentation, the salesperson is opportuned to give a detailed information about the product he is trying to sell to the customer.

5 0
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