Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income. Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations. The formula of times interest earned ratio is – T i m e s i n t e r e s t e a r n e d r a t i o = I n c o m e b e f o r e I n t e r e s t a n d T a x e s I n t e r e s t E x p e n s e Requirement 1 To determine: Times-interest-earned ratio for Cash and Pennington

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Answer 1

Question

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

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A production department's output for the most recent month consisted of 20,000 units completed and transferred to the next stage of production and 20,000 units in ending goods in process inventory. The units in ending goods in process inventory were 70% complete with respect to both direct materials and conversion costs. There were 3,000 units in beginning goods in process inventory, and they were 90% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

Answer 2

Question

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Expert Solution & Answer

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See solution

Answer 5

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Answer 6

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

Answer 7

Chapter 11, Problem E11.24E

To determine

Interest Expense and Net Income: The interest Expense is the expense other than operating expenses and is considered as an obligation on the entity to be paid. The net income is calculated after deducting interest expense and income tax expense from the operating income.

Times interest earned ratio: It is the measure of a company’s ability to pay its debts obligations or interest obligations.

The formula of times interest earned ratio is –

$T i m e s i n t e r e s t e a r n e d r a t i o = \frac{I n c o m e b e f o r e I n t e r e s t a n d T a x e s}{I n t e r e s t E x p e n s e}$

Requirement 1

To determine:

Times-interest-earned ratio for Cash and Pennington

Answer 8

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Answer 9

To determine

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

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Requirement 2:

To determine:

The company which has better ability to cover its interest expense.

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Chapter 11 Solutions

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Requirement 2: To determine: The company which has better ability to cover its interest expense.

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Chapter 11 Solutions

Requirement 2:

To determine:

The company which has better ability to cover its interest expense.