Exhibit 5-2 The Following Is an Income Statement from the Financial Records

question 18

Multiple Choice

Exhibit 5-2
The following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015:
-Refer to Exhibit 5-2. Compute earnings-based interest coverage for Peace, Love, and Joy Company.

• A) 5.72 times
• B) 16.88 times
• C) 6.72 times
• D) 6.08 times

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Definitions:

Metacarpal Bones

Metacarpal bones are the five long bones in the hand located between the wrist (carpal bones) and the fingers, forming the skeletal structure of the palm.

Carpal Bones

The eight small bones that make up the wrist, allowing for a wide range of movement.

Opponens Pollicis

A muscle in the hand that allows the thumb to touch the tips of the other fingers, a key movement for grasping objects.

Opposition

A movement in which the thumb and fingers are brought together, allowing for the manipulation of objects.