The adjusted trial balance of Vinny’s Dance Studio Company follows: 

Requirements 

1. Prepare the classified balance sheet of Vinny’s Dance Studio Company at August 31, 2025. Use the report form. You must compute the ending balance of Retained Earnings. 

2. Compute Vinny’s Dance Studio’s current ratio at August 31, 2025. One year ago, the current ratio was 1.76. Indicate whether Vinny’s Dance Studio’s ability to pay current debts has improved, deteriorated, or remained the same.

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Account Title Cash Supplies Prepaid Rent VINNY'S DANCE STUDIO COMPANY Adjusted Trial Balance August 31, 2025 Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense-Equipment Supplies Expense Utilities Expense Total Balance Debit $ 15,800 2,000 900 49,000 1,100 3,300 1,500 300 400 600 $ 74,900 Credit $ 5,500 4,500 500 5,100 4,400 16,500 20,300 18,100 $ 74,900