Question: How do I calculate the debt service coverage ratio for 2017 on this company? The following information is available from the balance sheets at the

How do I calculate the debt service coverage ratio for 2017 on this company?

How do I calculate the debt service coverage ratio for 2017 on

The following information is available from the balance sheets at the ends of the two most recent years and the income statement for the most recent year of Impact Company: December 31 2017 2016 Accounts payable $3 65,000 $ 50,000 Accrued liabilities 25,000 35,000 Taxes payable 60,000 45,000 Short-term notes payable 0 ?5,000 Bonds payable due within next year 200,000 200,000 Total current liabilities $ 350,000 $ 405,000 Bonds payable 5,; 600,000 $ 800,000 Common stock, $10 par $1,000,000 $1,000,000 Retained earnings 650,000 500,000 ) Total stockholdersr equity $1,650,000 $1,500,000 Total liabilities and stockholders' equity $2,500,000 $2,705,000 2017 Sales revenue $1,600,000 Cost of goods sold 950,000 Gross profit $3 650,000 Selling and administrative expense 300,000 Opelating income '5 350,000 Interest expense 89,000 Income before tax $ 261,000 Income tax expense 111,000 Net income '5 150,000 Other Information: a. Short-term notes payable represents a 12mon1 loan that matured in November 2017. Interest of 12% was paid at maturity. b. One million dollars of serial bonds had been issued ten years earlier. The rst series of $200,000 matured at the end of 201?, with interest of 3% payable annually. c. Cash ow from operations was $185,000 in 201?. The amounts of interest and taxes paid during 2017Ir were $89,000 and $96,000, respecliuely

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