Question: The Lancaster Corporations income statement is given next. a. What is the times-interest-earned ratio? b. What would be the fixed-charge-coverage ratio? LANCASTER CORPORATION Sales.............................................................................. $246,000

The Lancaster Corporation’s income statement is given next.

a. What is the times-interest-earned ratio?

b. What would be the fixed-charge-coverage ratio?

LANCASTER CORPORATION

Sales..............................................................................           $246,000

Cost of goods sold........................................................            122,000

Gross profit...................................................................             124,000

Fixed charges (other than interest)...............................           27,500

Income before interest and taxes..................................          96,500

Interest..........................................................................              21,800

Income before taxes......................................................            74,700

Taxes (35%)..................................................................               26,145

Income after taxes........................................................          $ 48,555

Step by Step Solution

★★★★★

3.41 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a b Times interes... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

341-B-A-F-A (1202).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. To prepare a master budget for January, February, and March, use the following information. The companys...

Q:

What information does the times interest earned ratio provide?

Q:

A comparative income statement is given below for Ryder Company: The president is concerned that net income is down even though sales have increased during the year. The president is also concerned...

Q:

A comparative income statement is given below for Witzell Company: WITZELL COMPANY Comparative Income Statement The CEO is worried about the decline in net income despite the fact that sales have...

Q:

Overall ratio analysis (LO2) The balance sheet for Stud Clothiers is shown next. Sales for the year were $2, 400,000, with 90 percent of sales sold on credit. Compute the following ratios: a. Current...

Q:

The Lancaster Corporation's income statement is given below. a. What is the times-interest-earned ratio? b. What would be the fixed-charge-coverage ratio? LANCASTER CORPORATION Sales ................

Q:

The Lancaster Corporations income statement is given below. Pek nucauon a. What is the times-interest-earned ratio? ratios b. What would be the fixed-charge-coverage ratio? LANCASTER CORPORATION...

Q:

DS Excel for Excel fx Block, Hirt, and Danielsen Excel Excel for The Lancaster Corporation's income statement is given below. a. What is the times-interest-eared ratio? b. What would be the...

Q:

. The Lancaster Corporation's income statement is given below. LANCASTER CORPORATION Sales $ 256, 000 Cost of goods sold 181, 000 Gross profit $ 75, 000 Fixed charges (other than interest) 27, 700...

Q:

The Lancaster Corporation's income statement is given below. LANCASTER CORPORATION Sales Cost of goods sold Gross profit Fixed charges (other than interest) Income before interest and taxes Interest...

Q:

The Lancaster Corporations income statement is given below. LANCASTER CORPORATION Sales $ 265,000 Cost of goods sold 137,000 Gross profit $ 128,000 Fixed charges (other than interest) 25,100 Income...

Q:

Seasoned hikers prefer to step over a fallen log in their path rather than stepping on top and jumping down on the other side. Explain.

Q:

Exercise 27 describes the loan score method a bank uses to decide which applicants it will lend money. Only if the total points awarded for various aspects of an applicants financial condition fail...

Q:

The purpose of consumer protection laws is Group of answer choices to prohibit unfair business practices. to set minimum product standards. to provide procedures for correcting wrongs. all of these.

Q:

What evidence would a company use to generate the type of uncollectible accounts percentages given in the case? Given those percentages, what is the fair value of China Netcoms accounts receivable?...

Q:

Byrd Co. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $400,000 at the end of the...

Q:

Evaluate the 110 billion yuan price tag for the purchase of China Unicoms CDMA network and operations by China Telecom. Do you think China Telecom is paying too much or too little? Defend your...

Q:

Evaluate the 165 billion yuan price tag for the acquisition of China Netcom by China Unicom. Do you think the price is too high or too low? Defend your answer. Industry Shakeup Creates 3 Telecom...

Q:

Refer to Cornerstone Exercise 7.3. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to...

Q:

What is the value of Big Data and data analytics in observing the behav- iours of customers?

Q:

Lett's commercial paper is presently selling at a discount. It sells for 97.29 of par and matures in 120 days. a. Calculate its yield as quoted in the market. b. Calculate its effective annual yield.

Q:

Differentiate between the money market and the Eurobond market.

Q:

A bankers' acceptance is discounted by Canmex Inc. at 98.71 of par. It matures in 60 days. a. What is the cost to the company on a nominal basis? b. What is the effective annual cost to the company?

Q:

K Which of the following formulas is INCORRECT? O A. Div = EPS, X Dividend Payout Rate OB. PO = Div/(E 9) 0 OC. TE= (Div/Po) - g O D. g = Retention Rate x Return on New Investment Which of the...

Q:

B. Fine the chi - square test statistic round to two decimal places as needed. C. Determine the P value round to three decimal places as needed.D. The P value is _____ x=5 so _____ Ho.E. There is...

Q:

Help me please. Am stuck. The events that lead to potential claims on a policy arise as a Poisson process at a rate of 0.8 per year. However the policy is limited such that only the fust luce claims...