In a Recent Year Joey Corporation Had Net Income of $150,000

question 228

Multiple Choice

In a recent year Joey Corporation had net income of $150,000, interest expense of $40,000, and tax expense of $20,000. What was Joey Corporation's times interest earned for the year?

• A) 5.25
• B) 4.75
• C) 3.75
• D) 4.25

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Definitions:

Partial Balance Sheet

A financial statement that shows a subset of the assets, liabilities, and equity of a company at a specific point in time.

Total Current Assets

The value of all assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Journalize Transactions

The process of recording financial transactions in the journal as part of the accounting cycle.

Accounts Receivable Turnover

A financial ratio that measures how many times a company can turn its accounts receivable into cash during a period.