The condensed balance sheet and income statement for Marjoram Company are presented below. ...
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Accounting
The condensed balance sheet and income statement for Marjoram Company are presented below.
| MARJORAM COMPANY | |||
| Balance Sheet | |||
| At December 31, 2021 | |||
| Cash | $ | 25,500 | |
| Notes receivable (due August 15, 2022) | 42,000 | ||
| Accounts receivable (net) | 51,000 | ||
| Merchandise inventory | 74,500 | ||
| Property, plant, and equipment (net) | 315,000 | ||
| Intangible assets | 15,000 | ||
| Total assets | $ | 523,000 | |
| Current liabilities | $ | 120,400 | |
| Bonds payable(10%) (long-term) | 110,000 | ||
| Common stock | 61,000 | ||
| Retained earnings | 231,600 | ||
| Total liabilities and equity | $ | 523,000 | |
| MARJORAM COMPANY | |||
| Income Statement | |||
| For the Year ended December 31, 2021 | |||
| Sales | $ | 899,000 | |
| Cost of goods sold | 487,400 | ||
| Gross profit | $ | 411,600 | |
| Operating expenses | 181,800 | ||
| Operating income | $ | 229,800 | |
| Interest expense | 11,000 | ||
| Income before income tax | $ | 218,800 | |
| Income tax expense | 65,640 | ||
| Net income | $ | 153,160 | |
Required: Compute the times interest earned ratio for Marjoram Company. (Round your answer to 2 decimal places.)
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