Chapter 11: Q15RQ (page 604)
How is the times-interest-earned ratio calculated, and what does it evaluate?
Short Answer
The times-interest-earned ratio is the ratio between earnings before interest & tax (EBIT) and interest expense.
Chapter 11: Q15RQ (page 604)
How is the times-interest-earned ratio calculated, and what does it evaluate?
The times-interest-earned ratio is the ratio between earnings before interest & tax (EBIT) and interest expense.
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Get started for freeWhat is a contingent liability? Provide some examples of contingencies.
How is sales tax recorded? Is it considered an expense of a business? Why or why not?
What is a current liability? Provide some examples of current liabilities.
Consider the following note payable transactions of Creative Video Productions. 2017 Aug. 1 Purchased equipment costing $16,000 by issuing a one-year, 9% note payable. Dec. 31 Accrued interest on the note payable. 2018 Aug. 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company.
Rios Raft Company had the following liabilities.
a. Accounts Payable
b. Note Payable due in 3 years
c. Salaries Payable
d. Note Payable due in 6 months
e. Sales Tax Payable
f. Unearned Revenue due in 8 months
g. Income Tax Payable
Determine whether each liability would be considered a current liability (CL) or a long-term liability (LTL).
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