P4-29A 6 Preparing a classified balance sheet in report form, and using the leaisigg A current and debt ratios to evaluate a company [30-40 min] T Selected accounts of Blume Irrigation System at December 31, 2012, follow: Insurance expense Note payable, long-term $ 900 Accounts payable $24,700. 2,800 Accounts receivable 43,100 Other assets Building 2,200 Accumulated depreciation-building 24,000 55,800 Blume, capital, December 31, 2011 52,000 Prepaid insurance 4,000 Accumulated depreciation-equipment 7,900 Salary expense 16,300 Cash 11,000 Salary payable 3,900 Interest payable 400 Service revenue Supplies 74,800 Blume, drawing 3,300 Equipment 2,000 Unearned service revenue 41,600 Depreciation expense Requirements 23,000 30,500/ 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 1.81 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?