1. Calculate the 2010 and 2009 liquidity ratios identified using the Ratio Analysis table above. Also calculate the change and the percentage change for the ratios and complete the table.
2. Analyze the Chipmunk Company€™s ratios for both years and compare the figures with the given industry ratios. Based on the ratios identified, where do you think fraud may have occurred?
You are a fraud investigator who has been hired to detect financial statement fraud for the Chipmunk Company. You have been provided with the financial statements on the following pages and are now beginning your analysis of those financialstatements.

CHIPMUNK COMPANY BALANCE SHEET DECEMBER 31, 2010 AND 2009 Assets 2010 2009 Current assets Cash Accounts receivable: net (Notes 2 and 5) Inventories [Notes 1(a), 3, and 5] Prepaid apenses Deposits 1,320,096 1,646,016 13,524,349 17,720 7,916 S16,516,127 596517 S 1,089978 1,285593 12,356,400 15,826 5,484 $14,753281 612,480 Total current assets Property, plant, and equipment [Notes 1(b) and 4] at cost, less accumulated depreciation Total Assets Liabilities Current liabilities $17,112,644 15365,761 Notes payable-Bank (Note 5) Accounts payable Accrued labilities Pederal income taxes payable Current portion of long-term debt (Note 6) $5,100,000 1,750,831 257800 35,284 5,642 S 7,149,557 S 4,250,000 1403247 217,003 45990 5,642 S 5,921882 Total current liabilities Long-term liabilities Long-term debt (Note 6) Total Liabilities Stodkholders' Equity 409,824 415,466 S 7,559,381 S 6,337348 Common stock (Note 7) Additional paid-in capital Retained carnings $10,000 2,500,000 7,043,263 S 9,553,263 $17,112,644 $10,000 2,500,000 6,518,413 $9,028,413 $15,365,761 Total stockholders equity Total Liabilities and Stockholders' Equity