Country Company reported the following on its income statement: $$\begin{array} { l r }
\text { Income before income taxes } & \$ 850,000 \
\text { Income tax expense } & \underline { 250,000 } \
\text { Net income } & \underline { \$ 650,000 }
\end{array}$$ An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was
A) 3.4 times.
B) 9.5 times.
C) 6.5 times.
D) 8.5 times.

Question

Country Company reported the following on its income statement: $$\begin{array} { l r } 
\text { Income before income taxes } & \$ 850,000 \
\text { Income tax expense } & \underline { 250,000 } \
\text { Net income } & \underline { \$ 650,000 }
\end{array}$$ An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was
A) 3.4 times.
B) 9.5 times.
C) 6.5 times.
D) 8.5 times.

Quizplus · Accepted Answer

The Answer of Country Company reported the following on its income statement: $$\begin{array} { l r } 
\text { Income before income taxes } & \$ 850,000 \
\text { Income tax expense } & \underline { 250,000 } \
\text { Net income } & \underline { \$ 650,000 }
\end{array}$$ An analysis of the income statement revealed that interest expense was $100,000. Country Company's times interest earned was
A) 3.4 times.
B) 9.5 times.
C) 6.5 times.
D) 8.5 times.

Country Company Reported the Following on Its Income Statement An Analysis of the Income Statement Revealed That Interest Expense