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Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 14ISBN: 978-1305653535Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 14ISBN: 978-1305653535 Exercise 47
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...
Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac
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