In 2020 Rome Corporation reported net income $190,000, interest expense $60,000, and income tax expense $40,000. Rome's times interest earned was:
A) 4.2 times.
B) 3.8 times.
C) 3.2 times.
D) 4.8 times.

Question

Quizplus · Accepted Answer

Times interest earned = (Net Income + Interest Expense + Income Tax Expense) / Interest Expense

= ($190,000 + $60,000 + $40,000) / $60,000

= 4.8 times.

Therefore, the answer is option D.

In 2020 Rome Corporation Reported Net Income $190,000, Interest Expense