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saw5 [17]
1 year ago
8

Jack's Corp. has $5 billion is total assets, and its tax rate is 40%. Its basic earnings power (BEP) ratio is 12%, and its retur

n on assets (ROA) is 5%. What is Jack's times-interest earned (TIE) ratio?
Business
1 answer:
Inessa [10]1 year ago
7 0

Based on the information given Jack's times-interest earned (TIE) ratio is 3.28.

<h3>Times-interest earned (TIE) ratio is 3.28.</h3>

BEP = EBIT ÷ Total Assets

12% = EBIT ÷ $18 billion

EBIT = 12% × $5 billion

EBIT= $0.6 billion

ROA = Net Income ÷ Total Assets

5% = Net Income ÷ $5 billion

Net Income = 5% × $5 billion

Net income= $0.25 billion

Earning before tax:

Earning before tax= Net income ÷ (1 - tax)

Earning before tax= $0.25 ÷ (1 - 0.40)

Earning before tax= $0.25 ÷ 0.60

Earning before tax= $0.417 billion

Interest Expense:

Interest Expense= EBIT - EBT

Interest Expense= $0.6 billion - $0.417billion

Interest Expense= $0.183 billion

Times interest earned ratio:

Times interest earned ratio= EBIT ÷ Interest expense

Times interest earned ratio= $0.6 billion ÷ $0.183 billion

Times interest earned ratio= 3.28

Inconclusion Jack's times-interest earned (TIE) ratio is 3.28.

Learn more about  times-interest earned (TIE) ratio here:brainly.com/question/17150434

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Answer:

L-Ten, Triol and Pioze

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Total Costs $750,000  ; $750,000  ; $510,000

Gross Profits $250,000  ; $1,250,000  $190,000  

Explanation:

Gross Margin percentage = Gross margin / Revenue

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Gross Margin Percentage = $1,690,000 / $3,700,000 = 0.45

Gross margin percentage is 45%

7 0
3 years ago
The maximum penalty for failure to report that you accepted a gift from a non-federal entity may result in
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For failure to report the acceptance of a gift from a non-federal entity may result in punishment under the UCMJ - the Uniform Code of Military Justice.

7 0
3 years ago
A bond will sell at a premium when its coupon interest rate: is lower than the market interest rate on similar bonds. equals the
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A bond will sell at premium when its coupon interest rate <u>exceeds the market interest rate on similar bonds.</u>

Explanation:

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In simple lay man's language, the term premium and discount can be understood to carry a crude definition of high and low demand. When the demand would be high, the bonds would fetch a higher value and vice-versa.

Thus Bonds would highly be valued when it is paying interest that is greater than the interest prevailing in the market contemporarily.

8 0
3 years ago
At December 31, 2019, Blanda Company had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2020, Blanda wro
Alex73 [517]

Answer:

journal entries

Write-off

Debit Bad Debts expense $11,000 Credit Accounts receivable $11,000

Recovery

Debit Bank $1,800 Credit Bad Debt Recovered income $1,800

Allowance for Doubtful debt Adjustment

Debit Allowance for doubtful debt Adjustment $4,000 Credit Allowance for doubtful debt $4,000

Explanation:

Write-off

The write-off creates an expense (bad debt) and and decreases an asset ( Accounts receivable)

Recovery

Since the amount has been written off as bad, when it is recovered it is no longer recognized as a payment on accounts receivable but an income the entity thought was lost.

Allowance for doubtful debt adjustment

The differences in the opening balance and closing balance either creates an expense or an income adjustment. These estimates are on net Accounts receivables ( after bad debts) are a negative assets.

19000 - 15000 = 4000(increase) adjustment and is an expense.

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3 years ago
At what point does corporation make money from stocks
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Answer:

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After the stock is sold to an investor the stock goes into the secondary market, In the secondary market the people that make a profit out of the sale of a stock are the stockholders but not the corporation.  

3 0
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