Balance sheet and income statement data indicate the following: Bonds payable, 8% (due in 15 years) $1,293,062 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 411,786 Income tax for year 123,536 Common dividends paid 60,000 Preferred dividends paid 16,000 Based on the data presented, what is the times interest earned ratio (round to two decimal places)? a.4.98 b.2.79 c.1.79 d.3.98

Balance sheet and income statement data indicate the following: Bonds payable, 8% (due in 15 years) $1,293,062 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 411,786 Income tax for year 123,536 Common dividends paid 60,000 Preferred dividends paid 16,000 Based on the data presented, what is the times interest earned ratio (round to two decimal places)? a.4.98 b.2.79 c.1.79 d.3.98

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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Question

Balance sheet and income statement data indicate the following:

Bonds payable, 8% (due in 15 years)	$1,293,062
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	411,786
Income tax for year	123,536
Common dividends paid	60,000
Preferred dividends paid	16,000

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

a.4.98

b.2.79

c.1.79

d.3.98

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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