Question
Please refer to Table 41 for the following questions. Table 41 Stewart Company Balance Sheet Assets: Cash and marketable securities $600,000 Accounts receivable 900,000 Inventories
Please refer to Table 41 for the following questions.
Table 41
Stewart Company
Balance Sheet
Assets: |
|
|
Cash and marketable securities |
| $600,000 |
Accounts receivable |
| 900,000 |
Inventories |
| 1,500,000 |
Prepaid expenses |
| 75,000 |
Total current assets |
| $3,075,000 |
Fixed assets | 8,000,000 |
|
Less: accum. depr. | (2,075,000) |
|
Net fixed assets |
| $5,925,000 |
Total assets |
| $9,000,000 |
|
|
|
Liabilities: |
|
|
Accounts payable |
| $800,000 |
Notes payable | 700,000 | |
Accrued taxes |
| 50,000 |
Total current liabilities |
| $1,550,000 |
Longterm debt |
| 2,500,000 |
Owner's equity (1 million shares of common stock outstanding) |
| 4,950,000 |
Total liabilities and owner's equity |
| $9,000,000 |
|
|
|
Net sales (all credit) |
| $10,000,000 |
Less: Cost of goods sold |
| (3,000,000) |
Selling and administrative expense |
| (2,000,000) |
Depreciation expense |
| (250,000) |
Interest expense |
| (200,000) |
Earnings before taxes |
| 4,550,000 |
Income taxes |
| (1,820,000) |
Net income |
| $2,730,000 |
Based on the information in Table 41, the times interest earned ratio is
A. 23.75 times.
B. 12.33 times.
C. 19.00 times.
D. 32.33 times.
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