How am I able to find the net income?

13.  Fixed charge coverage

ABC Corporation

Income Statement

For The Year Ending December 31, 201X

Sales (on credit)                                                                                                         $2,640,000

              Less: Cost of goods sold                                                             1,760,000

Gross profit                                                                                                 $  880,000

              Less: Selling and administrative expenses                                616,000*

Operating profit (EBIT)                                                                             $  264,000

              Less: Interest expense                                                                     33,000

Earnings before taxes (EBT)                                                                    $  231,000

              Less: Taxes                                                                                          82,500

Earnings after taxes (EAT)                                                                        $  148,500

*Includes $44,000 in lease payments.

ABC Corporation

Balance Sheet

December 31, 201X

Assets

Current assets:

              Cash                                                                                               $   77,000

              Marketable securities                                                                      44,000

              Accounts receivable (net)                                                             275,000

              Inventory                                                                                           220,000

                             Total current assets                                                     $  616,000

Investments                                                                                                     110,000

              Net plant and equipment                                                              484,000

Total assets                                                                                                 $1,210,000

Liabilities and Stockholders’ Equity

Current liabilities:

              Accounts payable                                                                        $ 143,000

              Notes payable                                                                                 132,000

              Accrued taxes                                                                                   33,000

                             Total current liabilities                                                $ 308,000

Long-term liabilities:

              Bonds payable                                                                                 220,000

              Total liabilities                                                                             $  528,000

Stockholders’ equity                                                                                        

Preferred stock, $110 par value                                                             $  165,000

              Common stock, $5.50 par value                                                    55,000

              Capital paid in excess of par                                                         220,000

              Retained earnings                                                                           242,000

                             Total stockholders’ equity                                         $  682,000

Total liabilities and stockholders’ equity                                              $1,210,000             

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How am I able to find the net income? was first posted on November 21, 2020 at 9:29 am.
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