Current Position Analysis

The bond indenture for the $10-$year, $8\%$ debenture bonds dated January $2,20$Y$8,$ required working capital of $$1,602,900,$ a current ratio of $5\mathrm{.}3,$ and a quick ratio of $3\mathrm{.}1$ at the end of each calendar year until the bonds mature. At December $31,20$Y$9,$ the three measures were computed as follows:

$1.$ Current assets:

Cash $$204,000$

Temporary investments $255,000$

Accounts receivable $($net$)408,000$

Inventories $323,000$

Prepaid expenses $85,000$

Intangible assets $51,000$

Property, plant, and equipment $918,000$

Total current assets $($net$)$ $$2,244,000$

Current liabilities:

Accounts and short$-$term notes payable $$189,000$

Accrued liabilities $216,000$

Total current liabilities $(405,000)$

Working capital $$1,839,000$

$2.$ Current ratio $5\mathrm{.}5$ $$2,244,000-$: $$405,000$

$3.$ Quick ratio $5\mathrm{.}9$ $$1,122,000-$: $$189,000$

a$.$ There are errors in the calculation of the three measures of current position analysis. Determine the correct amounts. Round ratios to two decimal places.

Working capital $fill in the blank $1$

$870,000$

Current ratio fill in the blank $2$

$3\mathrm{.}15$

Quick ratio fill in the blank $3$

$2\mathrm{.}14$

b$.$ Based on the data, all of the following are true, regarding the bond indenture, except:

The company is in compliance with the requirements of the bond indenture.