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Secure https://edugen.wileyplus.com/edugen/shared/assignment/test/gprint.ur -Fall-2017/Copy of Fall 2017-Chapter 15 Exercise 15-13 atfield Corporation reports the following amounts in its 2017 financial statements: At December 31, 2017 For the Year 2017 Total assets Total liabilities Total stockholders' equity Interest expense Income t. expense Net income $1,220,000 732,000 $21,200 112,000 154,500 Compute the December 31, 2017, balance in stockholders' equity Total stockholders' equity Compute the debt to assets ratio at December 31, 2017. (Round answer to o decimal Debt to assets ratio Compute times interest earned for 2017. (Round answer to 1 decimal places, e.g. 25 Times interest earned ratio times

Explanation / Answer

Total Stockholders'equity = Total Assets - Total Liabilites

= $1,220,000 - $732,000 = $11,468,000

Debt to asset ratio = Total Liabilities / Total Assets

$732,000 / $1,220,000 = 0.6 or 60%

Times interest earned ratio = Interest before interest & tax (EBIT) / Interest Expense

EBIT = Net Income + Interest = $154,500 + $21,200 = $175,700

(since information about tax is not given Net income is considered as Income before tax)

Times interest earned ratio = $175,700 / $21,200 = 8.3 times

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