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Determine the times interest earned ratio for both years

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Question

The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years:

Current YearPrevious Year  Accounts payable$410,000 $250,000

Current maturities of serial bonds payable420,000 420,000

Serial bonds payable, 10%1,970,000 2,390,000

Common stock, $1 par value80,000 110,000

Paid-in capital in excess of par880,000 880,000

Retained earnings3,040,000 2,410,000

The income before income tax was $621,400 and $543,700 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.

b. Determine the times interest earned ratio for both years. Round to one decimal place.

Reference no: EM132323872

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