Balance sheet and income statement data indicate the followi

Balance sheet and income statement data indicate the following:

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

a.3.78

b.1.95

c.2.78

d.0.95

Bonds payable, 9% (due in 15 years)	$1,460,748
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	$365,697
Income tax for year	$109,709
Common dividends paid	$60,000
Preferred dividends paid	$16,000

Times Interest Earned ratio = EBIT/Int charges

Interest = 1460748 * 9% = 131467.32

EBIT = Profit before tax + Interest

= 365697 + 131467.32 = 497164.32

Ratio = 497164.32/131467.32 = 3.78

Option (a) is correct