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

question 22

Multiple Choice

Balance sheet and income statement data indicate the following: $\begin{array}{ll}\$ 1,000,000 & \text { Bonds payable, } 10 \% \text { (issued } 1988 \text { due 2012) } \\300,000 & \text { Preferred } 5 \% \text { stock, } \$ 100 \text { par (no change during year) } \\2,000,000 & \text { Common stock, } \$ 50 \text { par (no change during year) } \\350,000 & \text { Income before income tax for year } \\80,000 & \text { Income tax for year } \\50,000 & \text { Common cividends paid } \\15,000 & \text { Preferred dividends paid }\end{array}$ Based on the data presented above, what is the number of times bond interest charges were earned (round to one decimal point) ?

• A) 3.7
• B) 4.4
• C) 4.5
• D) 3.5