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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. 12.33 times.

B. 19.00 times.

C. 32.33 times.

D. 23.75 times.

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