TEW COMPANY

Balance Sheet

As of December $31$

ASSETS

Cash $ $20,000$

Accounts receivable $80,000$

Inventory $50,000$

Net plant and equipment $250,000$

Total assets $ $400,000$

LIABILITIES AND STOCKHOLDERS$$ EQUITY

Accounts payable $ $40,000$

Accrued expenses $60,000$

Long$-$term debt $130,000$

Common stock $100,000$

Paid$-$in capital $10,000$

Retained earnings $60,000$

Total liabilities and stockholders$$ equity $ $400,000$

TEW COMPANY

Income Statement

For the year ended December $31$

Sales $($all on credit$)$ $ $500,000$

Cost of goods sold $200,000$

Gross profit $ $300,000$

Sales and administrative expenses $20,000$

Fixed lease expenses $10,000$

Depreciation $40,000$

Operating profit $ $230,000$

Interest expense $20,000$

Profit before taxes $ $210,000$

Taxes $(35\%)73,500$

Net income $ $136,500$

Refer to the tables above. Fixed charge coverage for Tew Company is $\_\_\_\_\_\_\_\_\_$blank.

Multiple Choice

$23$x

$1\mathrm{.}95$x

$1\mathrm{.}3$x

$8\mathrm{.}0$x