Lucas Company has provided the following information:
Cash flow from operating activities,$360,000;
Net income,$306,000;
Interest expense,$30,000;
Interest cash payments,$20,000;
Income tax payments,$240,000;
Income tax expense,$246,000.
What was Lucas' times interest earned ratio?
A)18.9
B)19.4
C)28.3
D)31.0

Question

Lucas Company has provided the following information:
 Cash flow from operating activities,$360,000;
Net income,$306,000;
 Interest expense,$30,000;
 Interest cash payments,$20,000;
 Income tax payments,$240,000;
 Income tax expense,$246,000.
What was Lucas' times interest earned ratio?
A)18.9
B)19.4
C)28.3
D)31.0

Quizplus · Accepted Answer

Times interest earned ratio (19.4) = [Net income ($306,000) + Interest expense ($30,000) + Income tax expense ($246,000)] F1F1F1S1?F1F1F10 Interest expense ($30,000)

Lucas Company Has Provided the Following Information