Financial Statements for Narita Company Appear Below -Narita Company's Times Interest Earned for Year 2 Was Closest

question 23

Multiple Choice

Financial statements for Narita Company appear below:

$\begin{array}{|l|r|}\hline & \begin{array}{r}\text { Larned Company } \\\text { Income Statement }\end{array} \\& \text { For the Year Ended December 31, Year } 2\\ & \text { (dollars in thousands) } \\\hline \text { Sales (All on Account) } & \$ 2570 \\\hline \text { Costs of Goods Sold } & \$ 1790 \\\hline \text { Gross Margin } & \$ 780 \\\hline \text { Operating Expenses } & \$ 310 \\\hline \text { Net Operating Income } & \$ 470 \\\hline \text { Interest Expense } & \$ 30 \\\hline \text { Net Income before Taxes } & \$ 440 \\\hline \text { Income Taxes (30\%) } & \$ 132 \\\hline \text { Net Income } & \$ 308 \\\hline\end{array}$
-Narita Company's times interest earned for Year 2 was closest to which of the following?

• A) 10.3 times.
• B) 14.7 times.
• C) 15.7 times.
• D) 26.0 times.

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Definitions:

Microorganisms

Microorganisms are microscopic living organisms, including bacteria, viruses, fungi, and protozoa, that can exist as single cells or cell clusters.

Conglomerate

A coarse-grained sedimentary rock composed of rounded fragments or clasts of pre-existing rocks bound together by a matrix of finer particles and cement.

Marine Conditions

Environmental factors pertaining to the ocean or sea, including salinity, temperature, and ecosystems.

Nonmarine Conditions

Environmental or geological conditions that occur in areas not influenced by the sea, often referring to freshwater or terrestrial habitats.