A Company's Balance Sheet and Income Statement Accounts Follow

question 19

Multiple Choice

A company's balance sheet and income statement accounts follow: $\begin{array}{lrrr}\text {At December 31}& 2014 & 2013 & 2012\\\text {Assets}\\\text { Cash } & \$ 30,872 & \$ 36,086 & \$ 37,974 \\ \text { Accounts receivable, net } & 89,476 & 63,151 & 50,632 \\ \text { Merchandise inventory } & 112,499 & 83,450 & 54,467 \\ \text { Prepaid expenses } & 9,942 & 9,473 & 4,219 \\ \text { Plant assets, net } & 291,143 & 268,126 & 244,108 \\\hline \text { Total assets } & \$ 533,932 & \$ 460,286 & \$ 391,400 \\\hline \hline \text { Liabilities and Equity }\\ \text { Accounts payable } & \$ 130,290 & \$ 76,233 & \$ 50,632 \\ \text {Long-term notes payable secured by }\\ \text { mortgages on plant assets } & 98,372 & 103,748 & 107,769 \\\text { Common stock, \$ 10 par value } & 142,500 & 132,500 & 102,500 \\\text { Retained earnings } & 182,770 & 147,805 & 130,499 \\\hline \text { Total liabilities and equity } &\$ 533,932 & \$ 460,286 & \$ 391,400 \\\hline\end{array}$
$\begin{array}{lll}\text { For Year Ended December } 31&2014 & 2013 \\\text { Sales }& \$ 694,112 & \$ 547,740\\\text { Cost of goods sold } & \$ 423,408 & \$ 356,031 \\\text { Other operating expenses } & 215,175 & 138,578 \\\text { Interest expense } & 11,800 & 12,598 \\\text { Income taxes } & \underline {9,023} & \underline {8,216}\\ \text { Total costs and expenses } &\underline{659,406}&\underline{515,423}\\ \text { Net income } &\underline{\$ 34,706}&\underline{\$ 32,317}\\ \text {Earnings per share}&\underline{ \$ 2.14}&\underline{\$ 1.99 }\\\end{array}$
-What is the company's times interest earned ratio for 2013?

• A)3.57%
• B)4.22%
• C)3.69%
• D)2.75%
• E)2.57%

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Definitions:

Creeping

The slow, gradual movement or development of something, often unnoticed until it has become significant.

Locomotive Development

The progression of physical abilities in infants and young children, enabling them to move from one place to another, such as crawling, walking, and running.

Ulnar Grasp

An early motor skill in infants where objects are grasped with the entire hand, using the palm and the ulnar side (near the little finger).

Pincer Grasp

A developmental milestone in infants, involving the coordination of thumb and index finger to grasp small objects.