The adjusted trial balance of Melanie O'Mallie Dance Studio Company follows:

Requirements
1. Prepare the classified balance sheet of Melanie O'Mallie Dance Studio Company at August 31, 2018. Use the report form. You must compute the ending balance of Retained Earnings.
2. Compute O'Mallie's current ratio at August 31, 2018. One year ago, the current ratio was 1.76. Indicate whether O'Mallie's ability to pay current debts has improved, deteriorated, or remained the same.

Transcribed Image Text:

MELANIE O'MALLIE DANCE STUDIO COMPANY Trial Balance August 31, 2018 Balance Account Title Debit Credit S 1,000 Cash Office Supplies 1,800 Prepaid Rent 1,500 Equipment 49,000 $ 5,700 Accumulated Depreciation-Equipment 4,800 Accounts Payable Salaries Payable 100 Unearned Revenue 5,000 Notes Payable (long-term) 5,400 Common Stock 18,000 Retained Earnings 19,000 1,100 Dividends Service Revenue 18,100 3,600 Salaries Expense Rent Expense 1,100 Depreciation Expense-Equipment 400 Supplies Expense 500 Utilities Expense 1,100 $ 76,100 $ 76,100 Total