Selected accounts of Blume Irrigation Systems at December 31, 2007, follow:

Requirements 

1. Prepare Blume's classified balance sheet in reporf form at December 31, 2007. Show totals for total assets, total liabilities, and total liabilities and owner's equity.

2. Compute Blume's current ratio and debt ratio at December 31, 2007. At December 31, 2006, the current ratio was 1.60 and the debt ratio was 0.35 . Did the company's ability to pay both current and total debts improve or deteriorate during 2007? 

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Cotton Blume, capital $97,100 Accounts payable $ 19,800 Note payable, long-term 37,800 Accounts receivable 26.600 Other assets 3,600 Accumulated depreciation- Prepaid insurance 7,700 equipment 7,800 Insurance expense 6,600 Accumulated depreciation- Salary expense 24,600 building 11,600 Salary payable 3,900 Equipment 14,400 Supplies 2,500 Cash 6,500 Unearned service revenue 5,400 Service revenue 93,500 Interest payable 600 Building 122,700