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: Cash $99,000 Temporary investments 45,000 Accounts and notes receivable (net) 126,000 Inventories 36,000 Prepaid expenses 24,000 Intangible assets 115,200 Property, plant, and equipment 64,800 Total current assets (net) $510,000 Current liabilities: Accounts and short-term notes payable $96,000 Accrued liabilities 204,000 Total current liabilities (300,000) Working capital $210,000 2. Current ratio 1.7 $510,000 * $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. Working capital Current ratio Quick ratio b. Is the company satisfying the terms of the bond indenture? NoCurrent Position Analysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year Previous Year (in millions) (in millions) Cash and cash equivalents $3,693 $3,690 Short-term investments, at cost 2,623 6,852 Accounts and notes receivable, net 8,340 7,028 Inventories 3,435 4,581 Prepaid expenses and other current assets 1,145 1,694 Short-term obligations 366 3,891 Accounts payable 8,794 8,659 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio 2. Quick ratio b. The liquidity of Sherwood has increased some over this time period. Both the current and quick ratios have increased v . Sherwood is a strong company with ample resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved v during this period