STU Ltd. has the following balances as of August 31, 2025:

Account	Amount
Cash	$17,000
Accounts Receivable	$16,000
Inventory	$20,000
Prepaid Insurance	$2,600
Building	$65,000
Accumulated Depreciation	$13,000
Accounts Payable	$16,000
Notes Payable	$7,000
Long-Term Debt	$30,000
Common Stock	$55,000
Retained Earnings	$18,600

Requirements:

1. Create a classified balance sheet.
2. Calculate the current ratio and quick ratio.
3. Evaluate STU Ltd.'s short-term financial health.
4. Prepare adjusting journal entries for:
   • Depreciation expense: $6,500
   • Insurance expense: $1,300
5. Discuss how adjusting entries ensure the accuracy and completeness of financial reports.