E12-22A. (Learning Objective 4: Analyzing the ability to pay current liabilities) Barney Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 20X6. To answer this question, compute the following ratios for 20X6 and 20X5:

a. Current ratio

c. Debt ratio

b. Acid-test ratio

d. Times-interest-earned ratio Summarize the results of your analysis in a written report.

Cash Short-term investments..... Net receivables.. Inventory............... Prepaid expenses. Total assets... Total current liabilities Long-term debt Income from operations.. Interest expense 20X6 20X5 $ 21,000 $ 53,000 32,000 15,000 117,000 127,000 243,000 272,000 18,000 4,000 500,000 531,000 247,000 312,000 27,000 134,000 191,000 160,000 39,000 45,000