Question: Linden Company provided the following information: Current assets ...... $ 6,930 Current liabilities ..... 6,413 Liquid assets ............ 2,001 Total assets ............ 25,327 Total liabilities...

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

Required:

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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