The adjusted trial balance of Penny O€™Hara Dance Studio Company follows:

Requirements
1. Prepare the classified balance sheet of Penny O€™Hara Dance Studio Company at August 31, 2016. Use the report form. You must compute the ending balance of Retained Earnings.
2. Compute O€™Hara€™s current ratio at August 31, 2016. One year ago, the current ratio was 1.57. Indicate whether O€™Hara€™s ability to pay current debts has improved, deteriorated, or remained the same.

Transcribed Image Text:

PENNY O'HARA DANCE STUDIO COMPANY Trial Balance August 31, 2016 Balance Debit 14,400 2,600 1,400 54,000 Account Title Cash Office Supplies Prepaid Rent 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 Credit S 5,400 4,100 800 4,900 4,900 20,000 24,400 1,200 16,500 4,200 1,900 400 200 700 $ 81,000 $81,000