PE 17-7B Times interest charges are earned

A company reports the following:

Income before income tax $8,000,000
Interest expense 500,000

Determine the number of times interest charges are earned.

Answer:












Income Before Income Tax + 
Interest Expense 
Interest Charges Are Earned  = 
Number of Times 
Interest Expense 

$8,000,000 + $500,000 
Interest Charges Are Earned  = 
Number of Times 
Interest Charges Are Earned  = 
17.0