1. Thomson Company reported the following on its income statement:

Income before income taxes $420,000

Income tax expense 120,000

Net income $300,000

An analysis of the income statement revealed that interest expense was $40,000. Thomson Company's number of times interest charges are earned was

a. 7.5 times.

b. 9.5 times.

c. 8 times.

d. 11.5 times.

2. Which intangible assets are amortized over their useful life?

1. Patents
2. Goodwill
3. Trademarks
4. All of these

3. If net income is $130,000 and interest expense is $40,000 for 2011, what are the earnings per share on common stock for 2011 (rounded to two decimal places)?

1. $2.68
2. $2.32
3. $2.02
4. $2.17