XYZ Inc. has the following data:

• Cash: $22,000
• Accounts Receivable: $27,000
• Inventory: $42,000
• Prepaid Insurance: $3,000
• Accounts Payable: $14,000
• Notes Payable: $16,000
• Machinery: $90,000
• Accumulated Depreciation: $22,000
• Common Stock: $60,000
• Retained Earnings: $72,000

Requirements:

1. Prepare a classified balance sheet.
2. Calculate the quick ratio.
3. Journalize the following adjustments:
   • Depreciation expense: $3,500
   • Bad debts expense: $1,200
4. Analyze the company's equity position.
5. Explain the impact of accumulated depreciation on net book value.