The adjusted balances at December 31, 2023, for Derlak Enterprises are shown in alphabetical order below:

*The owner, Lee Derlak, made no additional investments during the year.

RequiredPrepare a comparative classified balance sheet at December 31, 2023.

Analysis Component:Are Derlak’s assets financed mainly by debt or equity in 2022? in 2023? Is the change in how assets were financed from 2022 to 2023 favourable or unfavourable? Explain.

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Accounts payable Accumulated amortization, franchise Accumulated amortization, patent Accumulated depreciation, equipment Accumulated depreciation, tools Accumulated depreciation, vehicles Cash Equipment Franchise Lee Derlak, capital* Lee Derlak, withdrawals Notes payable, due in 2026 Office supplies Operating expenses Patent Prepaid rent Salaries payable Service revenue Tools Vehicles 2023 2022 $56,800 $9,600 19,200 11,200 4,000 2,400 72,800 64,800 44,800 42,400 108,800 97,600 12,000 28,800 184,000 100,000 41,600 41,600 206,320 62,320 32,000 38,400 240,000 129,600 2,400 2,320 780,800 571,200 16,000 16,000 40,000 48,000 32,800 26,400 720,000 753,600 143,920 100,800 252,800 252,800