Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned The following data...
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Accounting
Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Earned
The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:
Current Year
Previous Year
Accounts payable
$340,000
$101,000
Current maturities of serial bonds payable
230,000
230,000
Serial bonds payable, 10%
930,000
1,160,000
Common stock, $1 par value
50,000
70,000
Paid-in capital in excess of par
550,000
550,000
Retained earnings
1,900,000
1,510,000
The income before income tax was $359,600 and $314,600 for the current and previous years, respectively.
a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.
Current year
Previous year
b. Determine the times interest earned ratio for both years. Round to one decimal place.
Current year
Previous year
c. The ratio of liabilities to stockholders' equity has and the number of times bond interest charges were earned has from the previous year. These results are the combined result of a income before income taxes and
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