d. Engage in a quasi-reorganization to eliminate the deficit in retained earnings. 1. Prepare a revised classified balance sheet to reflect the effect of management’s actions. 2. Compute the following...

d. Engage in a quasi-reorganization to eliminate the deficit in retained earnings.

1. Prepare a revised classified balance sheet to reflect the effect of management’s actions.

2. Compute the following ratios before and after management’s actions: current ratio and debt-to-equity ratio.

3. Given the above ratio analysis, if the ratios do not suggest an improvement, discuss the benefits of management’s actions.