The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2009, required working capital of $142,000, 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, 2010, 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: Cash $170,000 Temporary investments Accounts and notes receivable (net) Inventories 80,000 200,000 60,000 Prepaid expenses Intangible assets Property, plant and equipment Total current assets (net) 40,000 208,000 92,000 S850,000 Current liabilities: Accounts and short-term notes payable Accrued liabilities $160,000 340,000 Total current liabilities 500,000 Working capital $350,000 2. Current ratio 1.7 50,000 + $500,000 3. Quick ratio 1.2 $192,000 + $160,000