LINK TO TEXT LINK TO TEXT Cash Debt Coverage Ratio ???times Bramble Corp.’s inco

Question

LINK TO TEXT

LINK TO TEXT

Cash Debt Coverage Ratio ???times

Bramble Corp.’s income statement for the year ended December 31, 2017, had the following condensed information:
Service revenue $770,400 Operating expenses (excluding depreciation) $495,000 Depreciation expense 55,000 Unrealized loss on FV-NI investments 4,700 Loss on sale of equipment 11,700 566,400 Income before income taxes 204,000 Income tax expense 49,000 Net income $155,000
There were no purchases or sales of trading (FV-NI) investments during 2017.

Bramble’s statement of financial position included the following comparative data at December 31:
2017 2016 FV-NI investments $21,700 $26,400 Accounts receivable 34,200 54,200 Accounts payable 45,200 31,300 Income tax payable 6,700 8,700

Explanation / Answer

Workings:

Cash debt coverage ratio = Net cash provided by operating activities/Average current liabilities = $258300/$45950 = 5.6 times

Average current liabilities:

Average current liabilities = (51900 + 40000)/2 = $45950

Bramble Corp. Partial Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2017 Cash flows from Operating Activities Cash received from customers 790400 Cash paid to suppliers -481100 Cash paid for income taxes -51000 -532100 Net cash provided by operating activities 258300

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.