Balance Sheet and Income Statement Data Indicate the Following Based on the Data Presented, What Is the Times Interest

Multiple Choice

Balance sheet and income statement data indicate the following:? $$\begin{array} { l r } \text { Bonds payable, } 10 \% \text { (due in two years) } & \$ 1,000,000 \\\text { Preferred } 5 \% \text { stock, } \$ 100 \text { par (no change during year) } & 300,000 \\\text { Common stock, } \$ 50 \text { par (no change during year) } & 2,000,000 \\\text { Income before income tax for year } & 550,000 \\\text { Income tax for year } & 80,000 \\\text { Common dividends paid } & 50,000 \\\text { Preferred dividends paid } & 15,000\end{array}$$ Based on the data presented, what is the times interest earned ratio? (Round to one decimal point.)

A) 1.5
B) 6.4
C) 6.5
D) 5.5