Given the Following Data,determine the Number of Times Interest Charges

question 71

Essay

Given the following data,determine the number of times interest charges are earned ratio.
Net income,$70,000
Bonds payable,issued at face value,8%,$5,000,000
Preferred Stock,$50 par value,6%,10,000 shares issued & outstanding Tax rate is 30%

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Definitions:

Units-Of-Output Method

A depreciation method where the expense is calculated based on the units produced by the asset.

Depreciation Expense

This is the allocation of the cost of a tangible asset over its useful life.

Revenue

Income generated from normal business operations, usually from the sale of goods and services to customers.

Lessor

An entity or individual that leases or rents out an asset to another party, known as the lessee.