prepare the classified balance sheet of brian o rsquo brion dance studio company at 642936

Preparing a classified balance sheet, and calculating the current and debt ratios The adjusted trial balance and the income statement amounts from the August worksheet of Brian O’Brion Dance Studio Company follow:

BRIAN O’BRION DANCE STUDIO COMPANY Partial Worksheet Month Ended August 31, 2012
	Adjusted Trial Balance
Account	Debit	Credit
Cash	$15,800
Supplies	2,000
Prepaid rent	900
Equipment	49,000
Accumulated depreciation		$ 5,500
Accounts payable		4,500
Salary payable		500
Unearned service revenue		5,100
Long term note payable		4,400
Common stock		12,800
Retained earnings		23,700
Dividends	1,100
Service revenue		18,100
Salary expense	3,000
Rent expense	1,500
Depreciation expense	300
Supplies expense	400
Utilities expense	600
Total	$74,600	$74,600

Requirements

1. Prepare the classified balance sheet of Brian O’Brion Dance Studio Company at August 31, 2012. Use the report form. You must compute the ending balance of Retained earnings.

2. Compute O’Brion’s current ratio and debt ratio at August 31, 2012. One year ago, the current ratio was 1.49 and the debt ratio was 0.29. Indicate whether O’Brion’s ability to pay current and total debts has improved, deteriorated, or remained the same during the current year.