Exercise 17-8 Current position analysis The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2009, required working capital of $142,000, a current ratio of 1.7, and a quick ratio of 1.2 at the end of each calendar year until the bonds mature. At December 31, 2010, the three measures were computed as follows: 1. current assests:

Cash................................$170,000

Temporary Investments...........$80,000

Accounts and notes eceivables (net)$200,000

Inventories................................$60,000

Prepaid Expenses.........................$40,000 Intangible assests.........................$208,000

Property, plant, and equipment...........$92,000

total current assets (net) $850,000

Current Liabilites:

accounts and short term notes payable $160,000

Accured Liabilites.................................$340,000

Total current liabilites $500,000

Working Capial $350,000

2. Current ratio 1.7 $850,000 / $500,000

3. Quick ratio.........................1.2 $192,000 / $160,000

a. Several errors exist in the computations above. Correctly determine the three measures of current position analysis. Working capital: $ Current ratio: Quick ratio: