Last year,Jackson Company had a net income of $160,000,income tax expense of $66,000,and interest expense of $20,000.The company's times interest earned was closest to which of the following?
A) 3.70 times.
B) 8.00 times.
C) 9.00 times.
D) 12.30 times.

Question

Quizplus · Accepted Answer

The times interest earned ratio is calculated as (Net Income + Income Tax Expense + Interest Expense) / Interest Expense. Here, it is ($160,000 + $66,000 + $20,000) / $20,000 = 12.30 times.

Last Year,Jackson Company Had a Net Income of $160,000,income Tax