The bond indenture for the 20-year, \(11 \%\) debenture bonds dated January 2, 2007, required working capital of \(\$ 560,000\), a current ratio of 1.5 , and a quick ratio of 1.2 at the end of each calendar year until the bonds mature. At December 31, 2008, the three measures were computed as follows:

a. List the errors in the determination of the three measures of current position analysis.

b. Is the company satisfying the terms of the bond indenture?objs. 2, 3

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1. Current assets: Cash $190,000 Marketable securities 95,000 Accounts and notes receivable (net) 171,000 Inventories. 20,000 Prepaid expenses 4,500 Intangible assets 55,000 Property, plant, and equipment 65,000 Total current assets (net) $600,500 Current liabilities: Accounts and short-term notes payable. $250,000 Accrued liabilities 150,000 Total current liabilities. 400,000 Working capital $200,500 2. Current Ratio=1.50 ($600,500/$400,000) 3. Quick Ratio = 2.04 ($511,000/$250,000)