The Following Information Is from the Financial Records of Newton

question 11

Essay

The following information is from the financial records of Newton Company for 2014: $\begin{array}{|l|lc|}\hline \text { Sales } & \$ 620,000 \\\hline \text { Interest expense } & 26,000 \\\hline \text { Income tax expense } & 46,000 \\\hline \text { Net income } & 104,000 \\\hline\end{array}$
Required:
Calculate the number of times interest is earned for Newton in 2014. Round your answer to one decimal place.

---

Definitions:

Bonds Payable

A long-term debt instrument issued by a company to investors, representing the amount it is obligated to pay back with interest.

Fair Value

A market-based measurement that reflects the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties.

Pre-Tax Profit

The profit earned by a business before any tax is deducted.

Intercompany Sales

Transactions of goods or services between divisions or subsidiaries within the same parent company.