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Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159 Exercise 42
Current position analysis
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
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
Explanation
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a. Listing of errors in the determinatio...
Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
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