The financial statements of Black Barn Company are given below.Black Barn CompanyIncome Statement (2009) Sales$8,000,000 Cost of goods sold 5,260,000 Gross profit 2,740,000 Selling & administrative expenses 1,500,000 Operating profit 1,240,000 Interest expense 140,000 Income before tax 1,100,000 Tax expense 440,000 Net income$660,000 Balance Sheet2009 2008?? Cash$200,000 $50,000 Accounts receivable 1,200,000 950,000 Inventory 1,840,000 1,500,000 Total current assets$3,240,000 $2,500,000 Fixed assets 3,200,000 3,000,000 Total assets$6,440,000 $5,500,000 Accounts Payable$800,000 $720,000 Bank loan 600,000 100,000 Total current liabilities$1,400,000 $820,000 Bond
payable 900,000 1,000,000 Total liabilities$2,300,000 $1,820,000 Common stock (130,000 shares)$300,000 $300,000 Retained earnings 3,840,000 3,380,000 Total liabilities & equity$6,440,000 $5,500,000 Note: The common shares are trading in the stock market for $40 each.Refer to the financial statements of Black Barn Company. The firm's times interest earned ratio for 2009 is
A. 7.17.
B. 8.86.
C. 9.66.
D. 6.86.
E. None of the options are correct.
Answer: B
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