Selected Income Statement Data - for the year ending December 31, 2017: Net sales $4,885,340 Cost of goods sold (2,942,353 ) Selling expenses (884,685 ) Operating income 1,058,302 Interest expense (55,240 ) Earnings before income taxes 1,003,062 Income tax expense (401,225 ) Net income$ 601,837 Selected Statement of Cash Flow Data - for the year ending December 31, 2017: Cash flows from operations $1,456,084 Capital expenditures$745,862 Wilmington Corporation's times interest earned ratio in 2017 was: A. 20.57 B. 19.16 C. 10.89 D. 18.15

Option (b) is correct.

Explanation:

Given that,

Net sales = $4,885,340 Cost of goods sold = (2,942,353 ) Selling expenses = (884,685 ) Operating income =$1,058,302

Interest expense = $(55,240 ) Earnings before income taxes =$1,003,062

Income tax expense = $(401,225 ) Net income =$ 601,837

EBIT = Net income + Income tax expense + Interest expense

= $1,003,062 +$401,225 + $55,240 =$1,058,302

Times interest earned ratio in 2017:

= EBIT ÷ Interest expense

= $1,058,302 ÷$55,240

= 19.1582 or 19.16

Related Questions

Anner Manufacturing is developing an activity-based costing system to improve overhead cost allocation. One of the first steps in developing the system is to classify the costs of performing production activities into activity cost pools. Classify the cost of each activity in the following list into unit-, batch-, product-, or facility-level cost pools:

1. Labelling and packaging
2. Plant Security
3. Sales commission
4. Supplies

When you collect all the costs related to performing a particular activity (e.g. producing a product), you have created an activity cost pool. This helps to get an accurate estimate of the cost of that activity or task and is mostly applied in activity-based costing system. Different activities may require different cost pools.

The activities below are thus classified accordingly:

1. Labelling and Packaging - Batch Cost Pool

2. Plant Security - Facility Level Cost Pool

3. Sales Commission - Product Cost Pool. (This is incurred in selling the product and so must be pre-built into the price of the product.

4. Supplies - Unit Level Cost Pool (Supplies are incidental items that are expected to be consumed in the near future. Examples are paper clips that you use in the daily workings of the business. Supplies are differ from Materials which refer to the raw stock from which finished goods are made. Examples of material are raw materials, components, sub-components, and production supplies. Materials would go under Product Cost Pool.

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Sunland Company uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2020 was $277000. The balance in the same account at the end of 2021 is$419000. Sunland’s Cost of Goods Sold account has a balance of $2110000 from sales transactions recorded during the year. What amount should Sunland report as Cost of Goods Sold in the 2021 income statement? Answers Answer:$2,252,000

Explanation:

Calculation to determine what amount should Sunland report as Cost of Goods Sold in the 2021 income statement

Using this formula

2021 income statement Cost of Goods Sold =Cost of Goods Sold account+(2021 LIFO Reserve account ending balance-2020 LIFO Reserve account ending balance)

Let Plug in the formula

2021 income statement Cost of Goods Sold =$2110000+($419000-$277000) 2021 income statement Cost of Goods Sold =$2110000+$142,000 2021 income statement Cost of Goods Sold =$2,252,000

Therefore The amount that Sunland should report as Cost of Goods Sold in the 2021 income statement is $2,252,000 What are command groups also known as Answers Informal groups is something command groups were also known as. Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 230 units. This model costs Ray$396 to purchase from his supplier. His annual cost to carry inventory is 10% and he estimates that orders cost $38 to process. If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year? Answers Answer: It waster$74,941.2‬ per year

Explanation:

The procedure is as follow:

1. We calcualte the Economic order Quantity
2. Then we calculatethe cost for EOQ and current order size
3. compare to know the loss for inefficiency in inventory

1.- EOQ

D = annual demand 230 units x 12 month = 2,760

S= setup cost = ordering cost = 38

H= Holding Cost= 10% of unit cost 39.60

EOQ = 72.78028371 = 73

2.-  Calculate Cost:

EOQ cost:

orders 2,760 / 73 = 37.80 = 38 order x $38 each =$1,444

holding cost: 73 x 39.6 = $2,890.8 Total: 1,444 + 2,890.8 = 4,334.8 Current Cost: orders: 2,760 / 2,000 = 1.* = 2 order per year x$38 each = \$76

holding cost: 2,000 x 39.6 = 79.200‬

Total 79,200 + 76 = 79,276

3.- Difference:

79,276 - 4,334.8 = 74,941.2‬

Which of the following are significant ways in which service systems differ from manufacturing systems? (You may select more than one answer)a. Service is tangible unanswered.
b. You cannot inventory service checked.
c. Employees do not require any technical training unanswered.
d. The service itself cannot be patented checked.
e. The process is part of the product

The correct answers are letters "A", "B", "D" and "E".

Explanation:

A service system is a combination of Information Technology (IT) technologies and corporate networks that provide services to customers. Service systems have added values that differentiates and include the efforts of people in the operations. Online education programs are examples of service systems.

Manufacturing systems are the traditional organizations in which a product is created with the use of materials, labor, managerial support, and equipment to produce goods in organized and established cycles aiming to offer a product that satisfies consumers' needs.

Compared to manufacturing systems, service systems are intangible because even if people can make use of them, they are not physic; they cannot be inventoried since there is no specific form of measuring service systems by units; they cannot be patented because most service systems add value to already existing services with the use of technology; and, the process of providing the service is the product itself.

Service systems differ from manufacturing systems in several ways, particularly in that services can't be inventoried, they usually can't be patented, and the process of service delivery is often considered part of the product itself. Hence the correct option is (b, d).

Explanation:

Significant ways in which service systems differ from manufacturing systems include the fact that you cannot inventory service and the service itself cannot usually be patented. These characteristics highlight major differences between services and physical products.

In addition, the process of delivering the service is often considered part of the product in a service system. For instance, customer experience is integral to services delivery, unlike in manufacturing where the product and its manufacturing process are usually distinct.

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3. Individual Problems 8-3 Suppose that due to the outbreak of a new flu, known as H14N9, the demand for hand sanitizer has tripled. Smith & Smith, a company that produces and sells hand sanitizer, should production of its hand sanitizer. Suppose there is no vaccine for H14N9, and that a vaccine will not be developed for several decades. True or False: Smith & Smith should increase its productive capacity by leasing new plant and equipment.