Refer to the Following Selected Financial Information from Shakley's Incorporated

question 224

Multiple Choice

Refer to the following selected financial information from Shakley's Incorporated. Compute the company's times interest earned for Year 2. $$\begin{array} { | l | r | r | } \hline & { \text { Year 2 } } & { \text { Year 1 } } \\\hline \text { Net sales } & \$ 478,500 & \$ 426,250 \\\hline \text { Cost of goods sold } & 276,300 & 250,120 \\\hline \text { Interest expense } & 9,700 & 10,700 \\\hline \text { Net income before tax } & 67,250 & 52,680 \\\hline \text { Net income after tax } & 46,050 & 39,900 \\\hline \text { Total assets } & 317,100 & 288,000 \\\hline \text { Total liabilities } & 181,400 & 167,300 \\\hline \text { Total equity } & 135,700 & 120,700 \\\hline\end{array}$$

• A) 14.0.
• B) 7.9.
• C) 4.8.
• D) 5.8.
• E) 6.9.

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Definitions:

Fetch

The process by which a computer retrieves data or instructions from memory.

Nonvolatile Storage

Permanent storage, as in read-only memory (ROM).

RAM Memory

Volatile computer memory where data can be read and written, used for storing the operating system, application programs, and data in current use.

Read/Write Head

A component of a disk drive, such as a hard drive, that reads data from and writes data to the disk.