Balance Sheet and Income Statement Data Indicate the Following Based on the Data Presented Above,what Is the Number of

question 40

Multiple Choice

Balance sheet and income statement data indicate the following: $\begin{array}{lr}\text { Bonds payable, } 10 \% \text { due in two years } & \$ 1,000,000 \\\text { Preferred } 5 \% \text { stock, } \$ 100 \text { par no change during year } & 300,000 \\\text { Common stock, } \$ 50 \text { par no change during year } & 2,000,000 \\\text { Income before income tax for year } & 550,000 \\\text { Income tax for year } & 80,000 \\\text { Common dividends paid } & 50,000 \\\text { Preferred dividends paid } & 15,000\end{array}$ Based on the data presented above,what is the number of times bond interest charges were earned round to one decimal point?

• A)1.5
• B)6.4
• C)6.5
• D)5.5

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Definitions:

U.S. Courts

Judicial institutions within the United States responsible for interpreting laws, resolving disputes, and administering justice at federal and state levels.

Legal Assent

A promise to buy or sell that the courts will require that the parties obey.

Mutual Mistake

The result of an error by both parties about a material fact, i.e., one that is important in the context of a particular contract.

Fraudulent Misrepresentation

The act of intentionally making false statements to induce another party to enter into a contract, resulting in harm or damage.