One of the similarities of bond and equity financing is that both dividends and equity distribution payments are tax deductible.

A company’s income before interest expense and income taxes is $350,000 and its interest expense is $100,000. Its times interest earned ratio is:

The debt-to-equity ratio is calculated by dividing total stockholders’ equity by total liabilities.

Decision makers and other users of financial statements are especially interested in evaluating a company’s ability to use its assets in generating sales.

Revenue expenditures:

The debt-to-equity ratio is calculated by dividing total stockholders’ equity by total liabilities.

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer’s payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

Revenue expenditures:

A lessee has substantially all of the benefits and risks of ownership in an operating lease.

A company purchased a weaving machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. In the first year, 15,000 bolts were produced. In the second year, production increased to 19,000 units. Using the units-of-production method, what is the book value of the machine at the end of the second year?