Balance sheet and income statement data indicate the following: Bonds payable, 8% (issued 2000, due 2024) Preferred 5% stock, $100 par (no change during year) Common stock, $50 par (no change during year) Income before income tax for year Income tax for year Common dividends paid Preferred dividends paid Company A $1,200,000 300,000 1,000,000 495,000 75,000 50,000 15,000 Company B $900,000 400,000 1,000,000 130,000 12,000 0 20,000 a. For each company, what is the times interest earned ratio? Round your answers to one decimal place. Company A Company B b. Which company gives potential creditors the most protection?

Balance sheet and income statement data indicate the following: a. For each company, what is the times interest earned ratio? Round your answers to one decimal place. b. Which company gives potential creditors the most protection