The financial statements of NANEI Company appear below:
| NANEI COMPANY | ||
| Comparative Balance Sheet | ||
| December 31 | ||
| 2013 | 2012 | |
| Assets | ||
| Cash | $25,000 | $40,000 |
| Marketable Securities | 20,000 | 60,000 |
| Accounts receivable (net) | 50,000 | 30,000 |
| Inventory | 140,000 | 170,000 |
| Property, Plant and Equipment (net) | 170,000 | 200,000 |
| Total Assets | $405,000 | $500,000 |
| Liabilities and stockholders’ equity | ||
| Accounts payable | $25,000 | $30,000 |
| Short-term notes payable | 40,000 | 90,000 |
| Bonds Payable | 75,000 | 160,000 |
| Common Stock | 160,000 | 145,000 |
| Retained earnings | 105,000 | 75,000 |
| Total Liabilities and Stockholders’ Equity | $405,000 | $500,000 |
| NANEI COMPANY | ||
| Income Statement | ||
| For the Year Ended December 31, 2013 | ||
| Net Sales (all on credit) | $360,000 | |
| Cost of goods sold | 184,000 | |
| Gross profit | 176,000 | |
| Expenses | ||
| Interest expense | $11,000 | |
| Selling expenses | 30,000 | |
| Administrative expenses | 20,000 | |
| Total Expenses | 61,000 | |
| Income before income taxes | 115,000 | |
| Income tax expense | 115,000 | |
| Net income | $80,000 | |
Additional Information:
Using the financial statements and additional information, calculate the Cash debt coverage ratio for the Nanei Company for 2013.
