Exhibit 3.1 the Balance Sheet and Income Statement Shown Below Are for Are

question 26

Multiple Choice

Exhibit 3.1
The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

-Refer to Exhibit 3.1.What is the firm's TIE?

• A) 1.94
• B) 2.15
• C) 2.39
• D) 2.66
• E) 2.93

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Definitions:

Tile Sales

Revenue generated from the sale of tiles, typically used for flooring or walls.

Contra-revenue Account

An account that is used to record deductions from gross revenue, which results in net revenue.

Sales Discount

A reduction in the price of goods or services offered to a customer, typically to encourage prompt payment or bulk purchasing.

Debit Balance

The condition of an account when the total of debits exceeds the total of credits, typically indicating assets or expenses.