The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2011, required working capital of $700,000, a current ratio of 1.7, and a quick ratio of 1.2 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?

1. Current assets: Temporary investments Accounts and notes receivable (net)... ...144,000 353,600 114,400 45,600 Total current assets (net) $1,520,000 Current liabilities: Accounts and short-term notes payable..$256,000 544,000 Total current liabilities 800,000 720,000 2. Current ratio 3. Quick ratio . ..^ . * . 1.9 $1,520,000 $800,000 1.3 $ 332,000 $256,000