Selected accounts of Browne Irrigation Systems at December 31, 2012, follow:

Requirements
1. Prepare the company€™s classified balance sheet in report form at December 31, 2012.
2. Compute the company€™s current ratio and debt ratio at December 31, 2012. At December 31, 2011, the current ratio was 1.83 and the debt ratio was 0.39. Did the company€™s ability to pay debts improve or deteriorate, or did it remain the same during2012?

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S 500 Accounts payable Insurance expense Note payable, long-term 4,200 Accounts receivable Other assets Building Prepaid insurance Salary expense Salary payable Service revenue Supplies Unearned service reveue 1,800 Depreciation expense $22,300 43,600 24,200 54,000 4,800 Accumulated depreciation-equipment 6,900 6,500 400 5,000 23,000 25,000 2,000 Accumulated depreciation building 58,200 Browne, capital, December 31, 2011 17,700 Cash 2,800 Interest payable 73,000 Browne, drawing 3,300 Equipment