Part 1:

A company had interest expense of $5,400, income before interest expense and income taxes of $17,600, and net income of $8,000. The company's times interest earned ratio equals:

Multiple Choice

• 0.68.

• 3.26.

• 2.20.

• 0.31.

• 1.48.

Part 2:

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $362,000 and a $131,000 note payable. Monroe invests $106,000 in cash and equipment that has a market value of $81,000. For the partnership, the amount recorded for Fontaine's Capital account is:

Multiple Choice

• $131,000.

• $231,000.

• $362,000.

• $493,000.

• $106,000.

Part 3:

Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $87,000. However, the building has a $49,000 note payable that will be assumed by the partnership. Smart is investing $34,000 cash. The balance of Maxwell's Capital account will be:

Multiple Choice

• $49,000.

• $72,000.

• $87,000.

• $38,000.

• $53,000.

Part 4:

A corporation issued 4,100 shares of its no par common stock at a cash price of $13 per share. The entry to record this transaction would be:

Multiple Choice

• Debit Cash $53,300; credit Paid-in Capital in Excess of Par Value, Common Stock $4,100; credit Common Stock $49,200.

• Debit Cash $53,300; credit Common Stock $53,300.

• Debit Common Stock $53,300; credit Cash $53,300.

• Debit Treasury Stock $53,300; credit Cash $53,300.

• Debit Treasury Stock $4,100; debit Paid-in Capital in Excess of Par Value, Treasury Stock $49,200; credit Common Stock $53,300.

Part 5:

The following data were reported by a corporation:

Authorized shares	30,000
Issued shares	25,000
Treasury shares	8,500

The number of outstanding shares is:

Multiple Choice

• 16,500.

• 21,500.

• 25,000.

• 38,500.

• 30,000.