Consider the following operating figures:
|
Net sales |
|
|
Cost and deductions: |
|
|
Cost of sales |
792,755 |
|
Selling and administration |
264,566 |
|
Interest expense, net |
4,311 |
|
Income taxes |
5,059 |
|
1,066,691 |
|
|
$ 12,452 |
Note: Depreciation expense totals $40,000.
Required a. Compute the times interest earned.
b. Compute the cash basis times interest earned.