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:

(a) List the errors in the determination of the three measures of current position analysis.(b) Is the company satisfying the terms of the bondindenture?

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1. Current assets: $1 70,000 80,000 200,000 60,000 40,000 208,000 92,000 Cash Temporary investments Accounts and notes receivable (net) Inventories Prepaid expenses Intangible assets Property, plant and equipment $850,000 Total current assets (net) Current liabilities: Accounts and short-term notes payable Accrued liabilities. .... $160,000 340,000 Total current liabilities 500,000 $350,000 Working capital 2. Current Ratio 3. Quick Ratio $850,000 + $500,000 1.7 1.2 $192,000 + $160,000