The Balance Sheet and Income Statement for the Year Ended

Multiple Choice

The balance sheet and income statement for the year ended 2013 indicate the following: $\begin{array}{ll}\$ 1,000,000 & \text { Bonds payable, } 12 \% \text { (issued 1998, due 2022) } \\300,000 & \text { Preferred 5\% stock, } \$ 100 \text { par (no change during year) } \\2,000,000 & \text { Common stock, } \$ 50 \text { par (no change during year) } \\300,000 & \text { Income before income tax for year } \\80,000 & \text { Income tax for year } \\50,000 & \text { Common dividendspaid } \\15,000 & \text { Preferred dividendspaid }\end{array}$
Based on the data presented above, what is the number of times interest charges were earned?

A) 3.5
B) 2.2
C) 4.0
D) The answer cannot be determined.