In a Recent Year Cold Corporation Had Net Income of $250,000

question 50

Multiple Choice

In a recent year Cold Corporation had net income of $250,000, interest expense of $50,000, and a times interest earned of 10. What was Cold Corporation's income before taxes for the year?

• A) $550,000
• B) $500,000
• C) $450,000
• D) None of the answers are correct.

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Definitions:

Selling Receivables

The process of selling a company's accounts receivable to a third party to improve liquidity and reduce the risk of uncollectible debts.

Voucher System

A control mechanism in accounting that requires all company expenditures to be documented with vouchers, supporting the authenticity of transactions.

Accounts Receivable

Outstanding receivables from clients to a business for supplied products or executed services awaiting payment.

Internal Control

Internal Control encompasses the policies, procedures, and actions implemented by a company to ensure the integrity of financial reporting, compliance with laws and regulations, and effective and efficient operations.