The adjusted trial balance and the income statement amounts from the August worksheet of Brian O€™Brion Dance Studio Company follow:

Requirements
1. Prepare the classified balance sheet of Brian O€™Brion Dance Studio Company at August 31, 2012. Use the report form. You must compute the ending balance of O€™Brion, capital.
2. Compute O€™Brion€™s current ratio and debt ratio at August 31, 2012. One year ago, the current ratio was 1.49 and the debt ratio was 0.29. Indicate whether O€™Brion€™s ability to pay current and total debts has improved, deteriorated, or remained the same during the currentyear.

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BRIAN O'BRION DANCE STUDIO COMPANY Partial Worksheet Month Ended August 31, 2012 Adjusted Trial Balance Debit Credit $15,800 Account Cash Supplies Prepaid rent Equipment Accumulated depreciation Accounts payable Salary payable Unearned service revenue Long-term note payable O'Brion, capital O'Brion, drawing Service revenue Salary expense Rent expense Depreciation expense Supplies expensc Utilities expense Total 2,000 900 49,000 S 5,500 4,500 500 5,100 4,400 36,500 1,100 18,100 3,000 1,500 300 400 600 $74.600$74,600