E4-18 Preparing a classified balance sheet and calculating the current ratio The adjusted trial balance of Melanie O’Mallie Dance Studio Company follows: Trial balance for Melanie O’Mallie Dance Studio Company for August 31, 2018 Account Title Balance - Debit Balance - Credit Cash 16,000 blank Office Supplies 1,800 blank Prepaid Rent 1,500 blank Equipment 49,000 blank Accumulated Depreciation—Equipment blank 5,700 Accounts Payable blank 4,800 Salaries Payable blank 100 Unearned Revenue blank 5,000 Notes Payable (long-term) blank 5,400 Common Stock blank 18,000 Dividends 1,100 blank Service Revenue blank 18,100 Salaries Expense 3,600 blank Rent Expense 1,100 blank Depreciation Expense—Equipment 400 blank Supplies Expense 500 blank Utilities Expense 1,100 (single underline) (single underline) Total 76,100 (double underline) 76,100 (double underline) Requirements 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. Total Assets $62,600 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.