Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 19BEA

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