Question
Averill Products Inc. reported the following on the companys income statement in 20Y8 and 20Y9: 20Y9 20Y8 Interest expense $440,000 $400,000 Income before income tax
Averill Products Inc. reported the following on the companys income statement in 20Y8 and 20Y9:
| 20Y9 | 20Y8 | |||
| Interest expense | $440,000 | $400,000 | ||
| Income before income tax expense | 5,544,000 | 4,400,000 | ||
a. Determine the times interest earned ratio for 20Y8 and 20Y9. Round to one decimal place.
| 20Y9 | 20Y8 | |||
| Times Interest Earned | fill in the blank 1 | fill in the blank 2 | ||
b. Is the change in the times interest earned ratio favorable or unfavorable?
FavorableUnfavorable
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ISE Managerial Accounting For Managers
Authors: Eric Noreen, Peter C. Brewer, Ray H. Garrison
5th Edition
1260570010, 9781260570014
