1.Prepare the classified balance sheet of Debbie O'Donnell Dance Studio Company at August 31, 2016. Use the report form. You must compute the ending balance of Retained Earnings.

2.Compute O'Donnell's current ratio at August 31, 2016. One year ago, the current ratio was 1.64. Indicate whether O'Donnell's ability to pay current debts has improved, deteriorated, or remained the same.

Thank you!

Debbie O'Donnell Dance Studio Company Trial Balance August 31, 2016 Balance Account Title Cash Office Supplies Prepaid Rent Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Pavable Unearned Revenue Notes Payable (long-term) Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense Equipment Supplies Expense Utilities Expense Total Debit Credit 15,300 1,600 1,200 54,000 $ 6,600 4,100 400 4,100 4,300 15,500 28,000 1,200 17,200 4,600 1,000 300 200 800 $80,200 $ 80,200