P4-7A Danier Leather Inc. is one of the largest publicly traded specialty apparel leather retailers in the world. The following information (all amounts in thousands) can be found on its recent balance sheets (or statements of financial position, as Danier Leather calls them): Cash and cash equivalents Accounts receivable Inventories Prepaid expenses Dec. 24, 2011 $31,803 1,686 36,789 426 June 25, 2011 $28,698 391 28,964 901 Dec. 25, 2010 $25,406 385 41,163 381 Dec. 24, 2011 June 25, 2011 Dec. 25, 2010 Property and equipment 15,315 14,404 15,808 Other long-term assets 2,677 2,732 2,943 Payables and accruals 16,010 11,024 19,650 Income taxes payable 583 278 1,097 Other current liabilities 3,586 1,536 3,659 Non-current liabilities 1,392 1,318 1,414 Shareholders' equity 67,125 60,272 61,928 Instructions (a) Calculate Danier Leather's current assets and current liabilities for each period. (b) Calculate Danier Leather's working capital, current ratio, and acid-test ratio for each period. (c) What does each of the measures calculated in part (b) show? Comment on Danier's liquidity. TAKING IT FURTHER The three balance sheet dates given in the problem are at two different points in the year (December and June). How, if at all, might that affect the comparability of the ratios