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3 years ago

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

Business

1 answer:

jarptica [38.1K]3 years ago

4 0

Answer:

a. 9.15 times

b. 4.61 times

c. 31.52%

d. 1.08 times

e. 20.88 %

Explanation:

<em>Note : I have attached the full question as image below.</em>

<em>Interest Coverage = Earnings Before Interest and tax ÷ Interest expense</em>

= $85,100 ÷ $9,300

= 9.15 times

<em>Fixed Charge Coverage = EBIT + Lease Payments ÷ Interest Payments + Lease Payments</em>

= $85,100 + $11,700 ÷ $9,300 + $11,700

= 4.61 times

<em>Profit margin = Operating Profit / Sales x 100</em>

= $85,100 / $270,000 x 100

= 31.52%

<em> Total asset turnover = Sales ÷ Total Assets </em>

= $270,000 ÷ $249,000

= 1.08 times

<em>Return on assets (investment) = Earning Before Interest after Tax / Total Assets x 100</em>

= ($45,480 + $9,300 x 70%) / $249,000 x 100

= 20.88 %

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3 years ago

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Answer:

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Apr. 1: Debit Cash $391,000

Credit Common stock $138,000

Credit Additional Paid-in Capital $253,000

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June 15: Debit Retained Earnings $120,500

Credit Dividends Payable $120,500

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July 10: Debit Dividends Payable $120,500

Credit Cash $120,500

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Credit Additional Paid-in Capital $19,500

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Explanation:

a) Data and Analysis:

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June 15: Retained Earnings $120,500 Dividends Payable $120,500 (97,500 + 23,000)

July 10: Dividends Payable $120,500 Cash $120,500

Dec. 1: Cash $28,500 Common stock $9,000 Additional Paid-in Capital $19,500

Dec. 12: Retained Earnings $353,800 Dividends Payable $353,800 (122,000 at $2.90 per share, i.e. 120,500 + 1,500 shares)

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