Complete this question by entering your answers in the tabs below. Identify the impact: Does Eugene's decision have an effect on First Federal Bank? Complete this question by entering your answers in the tabs below. Specify the options: Calculate the current ratio assuming the $1 million is treated as (a) service revenue or (b) revenue. (Round your answers to 2 decimal places.) Complete this question by entering your answers in the tabs below. Make a decision: Should Eugene record the $1 million as service revenue? Eugene Wright is CFO of Caribbean Crulse Lines. The company offers luxury cruises. It's near year-end, and Eugene is feeling kind of queasy. The economy is in a recession, and demand for luxury cruises is way down. Eugene doesn't want the company's current ratio to fall below the 1.0 minimum stated in its debt covenant with First Federal Bank. If the company reports a current ratio below 1.0 at year-end, First Federal may require immediate repayment of its $8 million loan, which is not due for another two years. At the end of the year, Caribbean Crulse Lines reports eurrent assets of $10:1 million and current liablities of $10 million. These amounts include advanced payments of $1 million from customers in December for cruises to be provided the following summer. Instead of treating the $1 million as deferred revenue, Eugene decided to count the cash received as revenue. He reasoned that cash has already been collected, and the company has a long history of providing crulses, so eustomers will be provided their cruise as scheculed, and the company will have cash to pay the bank in the future. Required: 1. Understand the reporting effect: How does Eugene's decision affect the reported amount of current ossets and current liabilities at the end of December? 2. Specify the options: Calculate the current ratio assuming the $1 million is treated as (a) service revenue or (b) deferred revenue. 3. Identify the impact: Does Eugene's decision have an effect on First Federal Bank? 4. Make a deciston: Shoutd Eugene record the $1 million as service revenue? Complete this question by entering your answers in the tabs below. Understand the reporting effect: How does Eugene's decision affect the reported amount of current assets and December? Understind the reporting effoct How does Eugene's deciaion affect the reported umount of curront assets and current liabuities at the and