The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and

Question:

The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and Pennington Automotive:

Cash Pennington Net income $ 74,188 $ 26,070 9,270 Income tax expense 27,080 2,900 Interest expense 300

Requirements
1. Compute the times-interest-earned ratio for each company. Round to two decimals.
2. Which company was better able to cover its interest expense?

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Horngrens Financial And Managerial Accounting The Financial Chapters

ISBN: 9780134486840

6th Edition

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

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Question Posted: Oct 27, 2017 04:03 AM

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The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and

Question:

Cash Pennington Net income $ 74,188 $ 26,070 9,270 Income tax expense 27,080 2,900 Interest expense 300

Step by Step Answer:

Requirement 1 Timesinterestearned ratio Cash Pennington ...View the full answer

Horngrens Financial And Managerial Accounting The Financial Chapters

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