Balance Sheet and Income Statement Data Indicate the Following: Bonds

Balance sheet and income statement data indicate the following: Bonds payable, 10% due in two years) $1,000,000
Preferred 5% stock, $100 par no change during year) 300,000
Common stock, $50 par no change during year) 2,000,000
Income before income tax for year
550,000
Income tax for year
80,000
Common dividends paid
50,000
Preferred dividends paid
15,000
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

Correct Answer:

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