1. Total Assets $67,500

The adjusted trial balance of Melanie OMallie Dance Studio Company follows:

Requirements

1. Prepare the income statement, statement of owners equity and classified balance sheet of Melanie OMallie Dance Studio Company at August 31, 2016.
2. Compute OMallies current ratio at August 31, 2016. One year ago, the current ratio was 1.25. Indicate whether OMallies ability to pay current debts has improved, deteriorated, or remained the same.

MELANIE OMALLIE DANCE STUDIO COMPANY Trial Balance August 31, 2016 Balance Account Title Debit Credit Cash $ 13,700 Office Supplies 1,600 Prepaid Rent 1,500 Equipment 57,000 Accumulated DepreciationEquipment $ 6,300 Accounts Payable 5,200 Salaries Payable 300 Unearned Revenue 4,200 Notes Payable (long-term) 5,300 OMallie, Capital 44,800 O'Mallie, Withdrawals 1,000 Service Revenue Salaries Expense 4,300 Rent Expense 1,400 Depreciation ExpenseEquipment 300 Supplies Expense 600 Utilities Expense 1,400 Total $ 82,800 $ 82,800 16,700