httpswwwmathxlcomSIU ciples of est Exam 2 Managerial Account

https://www.mathxl.com/SIU ciples of est: Exam 2 Managerial Accounting Web Summer 2018 Time Remaining: 00:57.46 Submit Tes is Question: 1 pt 6 of 32 (17 complete) This Test: 32 pts oh The Amos Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year End of current year End of prior year Net sales revenue (all credit) Cost of goods sold Gross profift Selling/general expenses Interest expense Net Income $1,220,000 $725,000 $495,000 $280,000 $48,000 $167,000 $113,000 $512.000 $625,000 582.000 $440,000 $522,000 Current assets Long-term assets Total assets O A. 4.48 times OB, 0.22 times ° C. 1 times D. 1.9 times

Solution

Net income = $167,000

Interest expense = $48,000

Earnings before interest and taxes (EBIT) = Net income + Interest expense = $167,000 + $48,000 = $215,000

Times-interest earned ratio = EBIT/Interest expense = $215,000/$48,000 = 4.47917 = 4.48

Hence, correct answer is A.4.48 times