Question: Linden Company provided the following information Current assets

Linden Company provided the following information:
Current assets ..... $ 6,930
Current liabilities ..... 6,413
Liquid assets ...... 2,001
Total assets ....... 25,327
Total liabilities ..... 13,453
A. Calculate the current and quick ratios.
B. Assume that management misclassified some of its investments as trading securities when in fact these securities should have been classified as held- to- maturity securities. Therefore, the liquid assets should be only $ 920. What is the impact on the current and quick ratios?
C. Why is investment classification important for external financial statement users?

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  • CreatedMarch 25, 2015
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