The bond indenture for the 10-year, 9% debenture bonds issued January 2, 2015, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 2016, 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 bond indenture?

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1 Current assets: Cash Temporary investments Accounts and notes receivable (net) Inventories Prepaid expenses Intangible assets Property, plant, and equipment . $102,000 48,000 120,000 36,000 24,000 124,800 Total current assets (net) $510,000 Current liabilities: Accounts and short-term notes payable Accrued liabilities. $96,000 204,000 300,000 $210,000 Total current liabilities 2. 3. Working capital Current ratio Quick ratio 1.7 $510,000$300,000 1.2 $115,200$ 96,000