Selected accounts of Blume Irrigation System at December 31, 2012, follow:

Requirements
1. Prepare the company€™s classified balance sheet in report form at December 31, 2012.
2. Compute the company€™s current ratio and debt ratio at December 31, 2012. At December 31, 2011, the current ratio was 1.81 and the debt ratio was 0.34. Did the company€™s ability to pay debts improve or deteriorate, or did it remain the same during2012?

$ 900 Accounts payable 2,800 Accounts receivable 2,200 Accumulated depreciation-building 55,800 Common stock 4,000 Accumulated depreciation-equipment Insurance expense Note payable, long-term Other assets Building Prepaid insurance Salary expense Salary payable Service revenue $24,700 43,100 24,000 16,900 7,900 11,000 400 16,300 Cash 3,900 Interest payable 74,800 Retained eamings, December 31, 2011 33,100 23,000 3,300 Equipment Supplies Unearned service revenue 1,600 Depreciation expense 30,500