What is Sherman, Inc.'s 20X2 times interest earned ratio?

a) 22.45 times

b) 31.37 times

c) 45.90 times

d) 46.00 times

EXHIBIT A Sherman, Inc. Balance Sheet As of December 31, 20X1 and 20X2 Assets 20X1 20x2 Marketable securities Accounts receivable Inventory Total current set $ 23,000 8,000 68.000 180.000 $277.000 $ 49,000 10.000 92.000 170,000 $321.000 Land Buildings Equipment Accumulated depreciation Total fixed assets (her) Total asset $ 50.000 125,000 170.000 $ 90,000 105.000 115,000 42.000 $268.000 $545.000 $276.000 $597.000 Liabilities and Stockholders' Equity Current liabilities Accounts payable 5.47.000 Notes payable-banka 50,000 Current portion of long-term debt-mortgage 30.000 Total current liabilities 5127.000 $ 34,000 30,000 30.000 $94.000 Long-term debt-mortgage Total abilities $120.000 $247.000 $190.000 $184.000 Common stock at par Petanned saming Total stockholders equity $164.000 134.000 1298,000 $214,000 199,000 $413.000 and stockholdere equity $345.000 EXHIBIT A (continued) Income Statement For years ended December 31, 2030, 20X1. and 2062 20x0 20X1 Net sales 53.150.000 53 154000 Cost of goods sold 2.331.000 2278.000 Gross profit $ $10.000 $ 425 005 17.000 22.000 Operating expenses Salary expense Advertising expense Depreciation expense (D) Repairs and maintenance Total operating expenses Operating profit Other income (expense) Interest income Interest expense Income before income tax Income taxes (30%) Net income $ 400.000 15 000 20,000 110.000 $445.000 $ 374,000 $ 411000 $467.000 31200 $ 800 14800 $360,000 $108.000 $262.000 5 1.000 12.000 $400.000 $_120,000 $ 458.000 Sherman, Inc. A Statement of Accounting Policies and Principles A Marketable Securities. Consist of shon-term interest-bearing securities stated at cost B. Accounts receivable. Shown net of towance for bad debt of $10.000 for 2001 and $10,000 for 20x2. Inventory Stated as latin first-out (LIFO) If the first in turtout FIFO method had been used, inventories for 20X1 and 20x2 would have been 540.000 and 560.000 higher respectively Noncurrent (fixed) assets. Consist of land building and equipment stated cost Depreciation calculated by the straightene method based on the imated useful life of the assets Land is not depreciated E Notes payable banks. Represents short-term unsecured loan trobat varying marka interest rates F. Long-term debi-mortgage. Represents the amount due net of current portion for a mortgage loan on the noncontent assets G. Average shares of common stock outstanding. For 2012 there were 180.000 shares of common stock outstanding H Shorman Inc is a producer of high quality widgets