Auto Industries Company Reported the Following on Its Income Statement

question 41

Multiple Choice

Auto Industries Company reported the following on its income statement: $\begin{array}{lr}\text { Income before income taxes } & \$ 420,000 \\\text { Income tax expense } & \underline{120,000} \\\text { Net income } & \$ 300,000\end{array}$ ? If the income statement also shows interest expense equal to $80,000, what is the company's times interest earned ratio?

• A) 5 times
• B) 8 times
• C) 5.25 times
• D) 6.25 times

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Definitions:

Percentage

A mathematical concept that represents a fraction of 100 as a figure of merit or loss in comparison.

Psychotherapy

A form of treatment involving psychological techniques, designed to improve mental health and resolve or mitigate troublesome behaviors, beliefs, feelings, and somatic responses.

Schizophrenia

A chronic and severe mental disorder that affects a person's thoughts, feelings, and behavior, leading to a range of psychological symptoms, including delusions and hallucinations.

Cognitive-behavioral Therapy

A form of psychotherapy that focuses on modifying dysfunctional emotions, behaviors, and thoughts by interrogative challenge.