ACC 210-Current Position Analysis-The bond indenture for the 10-year
Current Position AnalysisThe bond indenture for the 10-year, 9% debenture bonds issued January 2, 2015, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 2016, the three measures were computed as follows:1.Current assets:Cash$102,000Temporary investments48,000Accounts and notes receivable (net)120,000Inventories36,000Prepaid expenses24,000Intangible assets124,800Property, plant, and equipment55,200Total current assets (net)$510,000Current liabilities:Accounts and short-term notes payable$96,000Accrued liabilities204,000Total current liabilities300,000Working capital$210,0002.Current ratio1.7$510,000÷$300,0003.Quick ratio1.2$115,200÷$96,000a. Find the errors in the determination of the three measures of current position analysis. Then provide the correct amounts below. If required, round the ratios to one decimal place.Working capital$Current ratioQuick ratiob. Is the company satisfying the terms of the bond indenture?