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saw5 [17]
2 years 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]2 years 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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All of the following are true regarding implied agreements EXCEPT which one?
Brrunno [24]

Answer:

An implied agreement is based on a formal agreement.

Explanation:

A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.

There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implied contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, executory contract, etc.

Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent.

Simply stated, mutual assent connotes agreement, acceptance and consent to a contract by both parties.

An implied contract can be defined as an informal contract that exists based on an assumption or understanding between two or more parties, rather than on terms that are formally and specifically defined.

This ultimately implies that, an implied agreement is not based on a formal agreement but on assumptions or understanding between the parties involved.

4 0
2 years ago
Onslow Co. purchased a used machine for $178,000 cash on January 2. On January 3, Onslow paid $2,840 to wire electricity to the
arsen [322]

Answer:

2nd January

Dr Machinery              $178,000

  Cr Cash                    $178,000

( to record the purchase of used machine)

3rd January

Dr Machinery              $4,000

  Cr Cash                    $4,000

(to capitalized the cost of wire electricity and installation to put the purchased machine in a ready-to-use stage).  

Explanation:

- According to the information, all the expenses relating to the purchase of used machine are in cash. Thus, Cash is credited at the total amount of $182,000, in which $178,000 is credited in 2nd January to record the purchased price and the other $4,000 (2,840 + 1,160) is credited in 3rd January.

- Under GAAP, the recorded costs of a purchased fixed asset should included all the costs incurred which are necessary to bring the fixed asset to a ready-to-use stage. As wire electricity cost & cost for securing the machine in its position are all necessary for the machine's operation, these costs should be capitalized.  

6 0
3 years ago
Grouper Corp. retires its $640000 face value bonds at 105 on January 1, following the payment of annual interest. The carrying v
AleksAgata [21]

Answer:

Explanation:

The journal entry is shown below:

Bonds payable A/c Dr $640,000

Premium on bonds payable A/c Dr $23,970

Loss on bonds redemption A/c $8,030

         To Cash A/c $672,000                     ($640,000 × 1.05)

(Being the redemption of bond is recorded and the remaining balance is debited to the Loss on bonds redemption account)

The Premium on bonds payable is computed below:

= Carrying value of the bonds - face value of the bond

= $663,970 - $640,000

= $23,970

4 0
3 years ago
If chance or uncertainty is present in a system then there is an element of ____ in the decision making problem. a. danger b. ri
Elanso [62]

Answer: The answer is (D) Risk

Explanation:

3 0
2 years ago
Gently laser clinic purchased laser equipment for $4,445 and paid $633 down, with the remainder to be paid later. the correct en
xxMikexx [17]

Answer:

Accounts Payable $3,812 credit

<h3>Explanation:</h3>

Equipment  $4,445 debit,

Cash $633 credit,

now, $4445- $633 = $3,812

The correct entry would be $3,812.

To learn more about it, refer

to brainly.com/question/26106218

#SPJ4

5 0
2 years ago
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