current Position Analysis Sherwood inc

Current Position Analysis The bond Indenture for the 10-year, 9% debenture bonds issued January 2, 2015, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 2016, the three measures were computed as follows: 1. Current assets: $102,000 45,000 123,000 Cash Temporary Investments Accounts and notes receivable (net) Inventories Prepaid expenses Intangible assets Property, plant, and equipment Total current assets (net) 36,000 24,000 85,200 64,800 $480,000 Current liabilities: $96,000 Accounts and short-term notes payable Accrued liabilities 204,000 Total current liabilities (300,000) Working capital $180,000 2. Current ratio 1.6 $480,000 $300,000 3. Quick ratio 1.3 $124,800 + $96,000 a. Find the errors in the determination of the three measures of current position analysis. Then provide the correct amounts below. If required, round the ratios to one decimal place. a. Find the errors in the determination of the three measures of current position analysis. Then provide the correct amounts below. If required, round the ratios to one decimal place. Working capital Current ratio Quick ratio b. Is the company satisfying the terms of the bond indenture