The statement of financial position for Farley Corporation at the end of the current year indicates the following: Income before income taxes was $1,120,000 and income taxes expense for the current year amounted to $336,000. Cash dividends paid on ordinary shares were $300,000, and the ordinary shares were selling for $45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following:
(a) times interest earned.
(b) earnings per share.
(c) price-earnings ratio.

Question

The statement of financial position for Farley Corporation at the end of the current year indicates the following:  Income before income taxes was $1,120,000 and income taxes expense for the current year amounted to $336,000. Cash dividends paid on ordinary shares were $300,000, and the ordinary shares were selling for $45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following:
(a) times interest earned.
(b) earnings per share.
(c) price-earnings ratio.

Quizplus · Accepted Answer

The Answer of The statement of financial position for Farley Corporation at the end of the current year indicates the following:  Income before income taxes was $1,120,000 and income taxes expense for the current year amounted to $336,000. Cash dividends paid on ordinary shares were $300,000, and the ordinary shares were selling for $45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following:
(a) times interest earned.
(b) earnings per share.
(c) price-earnings ratio.

The Statement of Financial Position for Farley Corporation at the End