Alpha Co. has interest expense of $1.2 million, total assets of $84 million, sales of $76 million, long-term debt of $16.4 million, and net

Alpha Co. has interest expense of $1.2 million, total assets of $84 million, sales of $76 million, long-term debt of $16.4 million, and net income of $12.1 million. How will interest expense be recorded in the common-size income statement?

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  1. Answer:

    interest expense = 1.58 %

    Explanation:

    given data

    interest expense = $1.2 million

    total assets = $84 million

    sales = $76 million

    long-term debt = $16.4 million

    net income = $12.1 million

    solution

    interest expense = interest expense ÷ sales     …………….1

    put here value and we get

    interest expense =  [tex]\frac{1.2}{76}[/tex]  

    interest expense = 0.01576

    interest expense = 1.58 %

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