The Financial Statements of Snapit Company Are Given Below

Multiple Choice

The financial statements of Snapit Company are given below. $\begin{array}{c} \text { Snapit Company } \\\text { Income Statement (2009) }\\\begin{array}{lrr} \hline \text { Sales } & \$ 4,000,000 \\\text { Cost of goods sold } & \underline {3,040,000} \\\text { Gross profit } & 960,000 \\\text { Selling \& administrative expenses } & \underline { 430,000} \\\text { Operating profit } & 530,000 \\\text { Interest expense } & \underline {160,000 }\\\text { Income before tax } & 370,000 \\\text { Tax expense } & \underline {148,000} \\ \text { Net income } & \underline {\$ 222,000} \\\end{array} \end{array}$
$\begin{array}{c}\begin{array}{lll} \text { Balance Sheet } &2009\\\\ \text { Cash } &\$ 60,000 \\ \text { Accounts receivable } & 550,000 \\ \text { Inventory } & \underline {690,000} \\ \text {Total current assets } &\$ 1,300,000 \\ \text {Fixed assets } & \underline {1,300,000} \\ \text { Total assets } & \underline {\$ 2,600,000} \\\\ \text { Accounts Payable } &\$ 270,000 \\ \text { Bank loan } & \underline {580,000 } \\ \text { Total current liabilities } & \$ 850,000 \\ \text {Bond payable } & \underline { 900,000} \\ \text { Total liabilities } & \underline {\$ 1,750,000 }\\ \text { Common stock ( 130,000 shares) } & \$ 2500,000 \\ \text {Retained earnings } & \underline {600,000}\\ \text { Total liabilities \& equity } & \underline {\$ 2,600,000} \\\end{array}\begin{array}{lll}2008\\\\\$ 50,000 \\500,000 \\ \underline { 620,000 }\\ \$ 1,170,000 \\ \underline { 1,230,000} \\ \underline { \$ 2,400,000 }\\\\\$ 250,000 \\ \underline { 500,000 } \\ \$ 750,000 \\ \underline {1,000,000} \\ \underline {\$ 1,750,000 }\\\$ 250,000\\ \underline {400,000} \\ \underline { \$ 2,400,000 } \\\end{array}\end{array}$
Note: The common shares are trading in the stock market for $100 each. Refer to the financial statements of Snapit Company. The firm's times interest earned ratio for 2009 is

A) 2.26.
B) 3.16.
C) 3.84.
D) 3.31.
E) None of the options are correct.