Question: 1. Compute the times interest earned for Weltin Company, which reports income before interest expense and income taxes of $2,044,000, and interest expense of $350,000. Interpret its times interest earned (assume that its competitors average a times interest earned of 4.0).
2. Cather Corporation has made and recorded its quarterly income tax payments. After a final review of taxes for the year, the company identifies an additional $30,000 of income tax expense that should be recorded. A portion of this additional expense, $8,000, is deferred for payment in future years. Record Cather's year-end adjusting entry for income tax expense.