The following items, in alphabetical order, are available from the records of Quinn Corporation as of December 31, 2012 and 2011:

                                            December 31, 2012                 December 31, 2011

Accounts payable.....................$10,500......................................$ 6,500

Accounts receivable...................16,500.......................................26,000

Cash.....................................12,750.......................................11,800

Interest receivable.........................200................................................0

Note receivable, due 12/31/2014....12,000.......................................12,000

Office supplies.............................900.........................................1,100

Prepaid insurance..........................400............................................250

Salaries payable.........................1,800.............................................800

Taxes payable..........................10,000..........................................5,800

Required

1. Calculate the following as of December 31, 2012, and December 31, 2011:

a. Working capital

b. Current ratio

2. On the basis of your answers to (1), comment on the company's relative liquidity at the beginning and end of the year. Explain the change in the company's liquidity from the beginning to the end of 2012.