2. Preparing a classified balance sheet in report form, and using the (14 MARKS) current and debt ratios to evaluate a company Selected accounts of Blume Irrigation System at December 31, 2012, follow: Insurance expense $900 Accounts payable $24,700 Note payable, long-term 2,800 Accounts receivable 43,100 Other assets 2,200 Accumulated depreciation-building 24,000 Building 55,800 Prepaid insurance 4,000 Blume, capital, December 31,2011 52,000 Accumulated depreciation-equipment 7,900 Salary expense 16,300 Cash 11,000 Salary payable 3,900 Interest payable 400 Service revenue 74,800 Blume, drawing 2,000 Supplies 3,300 Equipment 23,000 Unearned service revenue 1,600 Depreciation expense 30,500 Requirements 1. Prepare the company's classified balance sheet in report form at December 31, 2012(11MARKS) 2.Compute the company's current ratio and debt ratio at December 31,2012. At December 31, 2011, the current ratio was 1.81 and the debt ratio was 0.34. Did the company's ability to pay debts improve or deteriorate, or did it remain the same during 2012? (3 MARKS)