Financial Statement Ratios The following items, in alphabetical order, are available from the records of Quinn Corporation as of December 31, 2008 and 2007:

Required 1. Calculate the following as of December 31, 2008 and December 31, 2007:

a. Working capital

b. Current ratio 2. On the basis of your answers to (1), comment on the relative liquidity of the company at the beginning and the end of the year. As part of your answer, explain the change in the company’s liquidity from the beginning to the end of 2008.

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Accounts payable December 31, 2008 December 31, 2007 $10,500 $ 6,500 Accounts receivable 16,500 Cash 12,750 26,000 11,800 Interest receivable 200 ---0-- Note receivable, due 12/31/2010 12,000 12,000 Office supplies 900 1,100 Prepaid insurance 400 250 Salaries payable 1,800 800 Taxes payable 10,000 5,800