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Sherwills statement of consolidated income is as follows: Net sales 658 other income 8 =666...

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Accounting

Sherwills statement of consolidated income is as follows:

Net sales 658 other income 8 =666

Costs and expenses:

Cost of products sold 418 Selling, general, and administrative expenses 196 Interest 16 =630

Income before income taxes and extraordinary charges 36 Income taxes 18 Income before extraordinary charge 18 Extraordinary chargelosses on tornado damage (net) 4 =Net income 14

Note: Depreciation expense totals $200; operating lease payments total $150; and preferred dividends total $50. Assume that one-third of operating lease payments is for interest. Required a. Compute the times interest earned. b. Compute the fixed charge coverage.

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