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Balance sheet and income statement data indicate the following: Bonds payable, 6% (due in 15 years) $1,200,000 Preferred 8% stock, $100 par     (no change during the year) 200,000 Common stock, $50 par     (no change during the year) 1,000,000 Income before income tax for year 320,000 Income tax for year 80,000 Common dividends paid 60,000 Preferred dividends paid 16,000 ​ Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?   a. 5.44   b. 4.33   c. 5.00   d. 4.00

Balance sheet and income statement data indicate the following: Bonds payable, 6% (due in 15 years) $1,200,000 Preferred 8% stock, $100 par     (no change during the year) 200,000 Common stock, $50 par     (no change during the year) 1,000,000 Income before income tax for year 320,000 Income tax for year 80,000 Common dividends paid 60,000 Preferred dividends paid 16,000 ​ Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?   a. 5.44   b. 4.33   c. 5.00   d. 4.00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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  1. Balance sheet and income statement data indicate the following:

    Bonds payable, 6% (due in 15 years)

    $1,200,000
    Preferred 8% stock, $100 par  
      (no change during the year)

    200,000
    Common stock, $50 par  
      (no change during the year)

    1,000,000
    Income before income tax for year

    320,000
    Income tax for year

    80,000
    Common dividends paid

    60,000
    Preferred dividends paid

    16,000

    ​

    Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?

      a.
    5.44
      b.
    4.33
      c.
    5.00
      d.
    4.00
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