Please answer and explain. The bond indenture for the 10-year, 10% debenture bon

Question

Please answer and explain.

The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2011, requiredworking capitalof $700,000, acurrent ratioof 1.7, and aquick ratioof 1.2 at the end of each calendar year until the bonds mature. At December 31, 2012, the three measures were computed as follows:

a. 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 ratio: Quick ratio:

Please answer and explain. The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2011, requiredworking capitalof $700,000, acurrent ratioof 1.7, and aquick ratioof 1.2 at the end of each calendar year until the bonds mature. At December 31, 2012, the three measures were computed as follows: a. 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.

Explanation / Answer

Working capital: $147,259 Current ratio: $ 56000 Quick ratio: $79851

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