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.. . Cengage CengageNOWv2 | Onl X C Chegg Study | Guided SolNews | Dashboard Samsung Galaxy S9 Plus O v2 cengageno con ilm takeAss gnment take ssignmentain doinvoker-assignments takeAssignmentsess on ocator-assignment t Ch 14-3 Exercises and Problems Calculator Print Itemm eBook Times Interest earned 1. EX.14-05.BLANKSHEET AL.. 2. EX.14-06.ALGO The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the United States Current Year $46,000 193,200 Preceding Year $50,000 120,000 3. EX.14-07.ALGO Interest expense Income before income tax a. Determine the times Interest earned ratio for the current and preceding years. Round to one declmal place Current year Preceding year b. Although Caliber Company had enough earnings to pay Interest In the preceding year, the 4. EX. 14-08,BLANKSHEETAL… 5. EX.14-09.ALGO 6. EX.14-12.ALGO 7. EX.14-14.ALGO In thls ratlo will be by the debtholders. Check My Work 2 more Check My Work uses remalning Previous Progress: 7/7 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading 9:25 PM Type here to search /19/2018 2Explanation / Answer
a. Current year:
Times interest earned ratio = ($193,200 + $46,000) / $46,000 = 5.2
Preceding year:
Times interest earned ratio = ($120,000 + $50,000) / $50,000 = 3.4
b.
Although Calber company had enough earnings to pay interest in the preceding year, the improvement in this ratio will be welcomed by the debtholders.
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