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