The Following Information Was Available for the Year Ended December

question 38

Multiple Choice

The following information was available for the year ended December 31, 2019: $$\begin{array} { l r } \text { Earnings before interest and taxes (operating income) } &\$ 50,000 \\\text { Interest expense } & 10,000 \\\text { Income tax expense } & 12,000 \\\text { Net income } & 28,000 \\\text { Total assets at year-end } & 200,000 \\\text { Total liabilities at year-end } & 120,000\end{array}$$ The times interest earned for the year ended December 31, 2019 was:

• A)2.8 times
• B)4.2 times
• C)5.0 times
• D)6.0 times

Prepare and adjust a trial balance.

Perform horizontal analysis of income statements.

Understand and classify increases and decreases in various types of accounts.

Calculate account balances given transaction data.

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