Aps Company reported the following on its income statement: $\begin{array}{ll}
\text { Income before income taxes } & \$ 420,000 \
\text { Income tax expense } & 120,000 \
\text { Net income } & \$ 300,000
\end{array}$ An analysis of the income statement revealed that interest expense was $60,000. Aps Company's times interest earned was
A) 6 times.
B) 9 times.
C) 8 times.
D) 5 times.

Question

Quizplus · Accepted Answer

Times interest earned = Income before income taxes / Interest expense= $420,000 / $60,000= 8 times

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