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QUESTION 10 If the times interest earned ratio for a company decreased from 8 times to 5 times, which of the following statements is true?

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QUESTION 10 If the times interest earned ratio for a company decreased from 8 times to 5 times, which of the following statements is true? This would be viewed positively by creditors. This would be viewed negatively by creditors. If the company's debt levels remained stable, it's likely the companies net income increased. None of the above statements are true. Clipboard Cell Styles A4 x x December 31, 2019 December 31, 20181 5 Assets in no particular order): 6 ! Cash 7 | Property, plant and Equipment 8 Accounts Receivable 9 Inventory 10 Prepaid Rent 11 Long-term Notes Receivable 12 Temporary Investments 13 14 Liabilities in no particular order): 15 Accounts Payable 16 Short-term Notes Payable 17 Wages Payable 18 Long-term Debt 19 Income Tax Payable 100,000 540,000 120,000 300,000 8,000 120,000 50,000 $120,000! 520,000 140,000 260,000! 7,5001 120,000 60,000! 100,000 50,000 10,000 300,000 30,000 210,000 10,000! 8,500 280,000 25,5001 Income Statement For the Year Ended December 31, 2019 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before tax Income tax Net income 1,000,000 600,000 400,000 120,000 60,000 220,000 11,000 209,000 62,700 146, 300

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