Listed here in random order are Wicks Construction Limited€™s balance sheet accounts and related ending balances as of December 31, 2016:

Additional information:
1. The company reports on the balance sheet the total amount for inventories and the net book value of property, plant, and equipment, with the related details for each account disclosed in notes.
2. The straight-line method is used to depreciate buildings, machinery, and equipment, based upon their cost and estimated residual values and lives. A breakdown of property, plant, and equipment shows the following: land at a cost of $32,000, buildings at a cost of $182,400 and a net book value of $120,200, machinery at a cost of $63,900, and related accumulated depreciation of $18,600, and equipment (40% depreciated) at a cost of $53,000.
3. Patents are amortized on a straight-line basis directly to the Patent account.
4. Inventories are listed at the lower of cost or market value using an average cost. The inventories include raw materials, $22,200; work in process, $34,700; and finished goods, $41,600.
5. Common stock has a $10 par value per share, 12,000 shares are authorized, and 6,280 shares have been issued.
6. Preferred stock has a $100 par value per share, 1,000 shares are authorized, and 400 shares have been issued.
7. The investment in bonds is carried at the original cost, which is the face value, and is being held to maturity.
8. Short-term investments in marketable securities were purchased at year-end.
9. The bonds payable mature on December 31, 2021.
10. The company attaches a 1-year warranty on all the products it sells.
Required:
1. Prepare Wicks Construction€™s December 31, 2016, balance sheet (including appropriate parenthetical notations).
2. Prepare notes to accompany the balance sheet that itemize company accounting policies; inventories; and property, plant, and equipment.
3. Compute the current ratio and the quick ratio. How do these two ratios provide different information about the company€™s liquidity? Why are these ratios useful?

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Income Taxes Payable Cash Surrender Value of Life Insurance Preferred Stock Premium on Bonds Payable Cash Property, Plant, and Equipment (net) Accounts Payable Common Stock Relained Eamings Land Held for Building Site Allowance for Doubtful Accounts $24,700 Short-Term Investments $19,100 80,000 30,300 98,500 32,300 18,200 25,000 23,400 6,200 7,300 8,900 40,000 Bonds Payable Additional Paidin Capital on Common Stock 4,800 Inventories 11,600 Accounts Receivable 229,300 Patents (net) 58,000 62,800 123,400 19,500 1,500 Investment in Bonds Additional Paidin Capital on Preferred Stock Miscellaneous Current Payables Estimated Liability for Product Warranties