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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