Question

The bond indenture for the 10-year, 8% debenture bonds dated January 2, 2011, required working capital of $200,000, a current ratio of 2.0, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 2012, 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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  • CreatedFebruary 04, 2014
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