# Copy of Answer 7-10 - If you want the formulas and any...

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If you want the formulas and any calculations, select the corresponding cell and press F2(Function Key on key board), It will show all calculations and formulas Automatically Question: P7-10 Required: 1.Times interest earned. Solution; Computation of the Times Interest Earned Only 2009 Times interest Earned = EBIT Interest Expense Where as EBIT \$124,000 \$280,000 − \$156,000 Interest Expense \$17,000 Times interest Earned = \$124,000 \$17,000 Times interest Earned = 7.29 Times per year Hence the Times interest Earned is 7.29 Times per year B. Compuate the fixed charge covereage. Solution: Computation of the fixed charge covereage Fixed charge covereage Recurring Earnings, Excluding Interest Expense, Tax Expense, Equity Earnings and Minority Earnings + Interest Portion of Rentals Interest Expense, Including Capitalized Interest + Interest Portion of Rentals Where as Recurring Earnings, Excluding Interest Expense, Tax Expense, Equity Earn \$134,000 \$280,000 − \$156,000 + \$10,000 Interest Expense, Including Capitalized Interest + Interest Portion of Rental \$27,000 \$17,000 + \$10,000 Fixed charge covereage \$134,000 \$27,000
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• Spring '12
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• Balance Sheet, Generally Accepted Accounting Principles, tangible net worth

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