Ask Question
30 April, 23:24

For the most recent year, Camargo, Inc., had sales of $546,000, cost of goods sold of $244,410, depreciation expense of $61,900, and additions to retained earnings of $74,300. The firm currently has 21,500 shares of common stock outstanding and the previous year's dividends per share were $1.25.

Assuming a 23 % income tax rate, what was the times interest earned ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

+1
Answers (1)
  1. 1 May, 02:52
    0
    As we know that time interest earned ratio = Income before interest and taxes / interest expense.

    Sales = 546000

    less: cost of goods sold = (244410)

    Gross profit 301590

    Less: expenses

    Depreciation expense = (61900)

    Profit before interest and taxes 239690

    Less: tax

    (239690 * 23%) = (55128)

    Profit 184562

    Profit - Retained earning Addition = Interest

    184562 - 74300 = 110262.

    Interest earned ratio = 239690 / 110262 = 2.17 times
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “For the most recent year, Camargo, Inc., had sales of $546,000, cost of goods sold of $244,410, depreciation expense of $61,900, and ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers