8.

Ratio of Liabilities to Stockholders' Equity and Number of Times Interest Charges are Earned

The following data were taken from the financial statements of Weal Construction Inc. for December 31 of two recent years:

	Current Year		Previous Year
Accounts payable	$355,000		$301,750
Current maturities of serial bonds payable	240,000		290,000
Serial bonds payable, 10%, issued 2009, due 2019	1,150,000		1,290,000
Common stock, $1 par value	80,000		90,000
Paid-in capital in excess of par	780,000		780,000
Retained earnings	2,630,000		2,400,000

The income before income tax was $363,200 and $321,000 for the current and previous years, respectively.

a. Determine the ratio of liabilities to stockholders' equity at the end of each year. Round to one decimal place.

Current year
Previous year

b. Determine the number of times the bond interest charges are earned during the year for both years. Round to one decimal place.

Current year
Previous year

c. The ratio of liabilities to stockholders' equity has and the number of times bond interest charges were earned has from the previous year. These results are the combined result of a income before income taxes and serial bonds payable in the current year compared to the previous year.