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The financial statements of Snapit Company are given below. Snapit Company Income Statement...

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Accounting

The financial statements of Snapit Company are given below.
Snapit Company Income Statement (2009)
Sales $ 4,000,000
Cost of goods sold 3,040,000
Gross profit 960,000
Selling & administrative expenses 430,000
Operating profit 530,000
Interest expense 160,000
Income before tax 370,000
Tax expense 148,000
Net income $ 222,000
Balance Sheet 20092008
Cash $ 60,000 $ 50,000
Accounts receivable 550,000500,000
Inventory 690,000620,000
Total current assets $ 1,300,000 $ 1,170,000
Fixed assets 1,300,0001,230,000
Total assets $ 2,600,000 $ 2,400,000
Accounts Payable $ 270,000 $ 250,000
Bank loan 580,000500,000
Total current liabilities $ 850,000 $ 750,000
Bond payable 900,0001,000,000
Total liabilities $ 1,750,000 $ 1,750,000
Common stock (130,000 shares) $ 250,000 $ 250,000
Retained earnings 600,000400,000
Total liabilities & equity $ 2,600,000 $ 2,400,000
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:
Multiple Choice
3.31.
3.84.
2.26.
None of the options are correct.
3.16.

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