The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2014, required working capital of
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The bond indenture for the 10-year, 10% debenture bonds dated January 2, 2014, 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, 2015, the three measures were computed as follows:
a. List the errors in the determination of the three measures of liquidity analysis.
b. Is the company satisfying the terms of the bond indenture?
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Related Book For
Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren
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