Reference no: EM131749354

Problem - A comparative balance sheet for Roxanne Company is presented below:

Comparative Balance Sheet

                                                              2017              2016

Assets

Cash                                                       $ 39,000       $ 31,000

Accounts receivable (net)                          80,000           60,000

Prepaid insurance                                     22,000           17,000

Land                                                        18,000           40,000

Equipment                                                70,000           60,000

Accumulated depreciation                          (20,000)       (13,000)

Total Assets                                              $209,000       $195,000

Liabilities and Stockholders' Equity

Accounts payable                                      $ 11,000        $  6,000

Bonds payable                                          27,000           19,000

Common stock                                          140,000         115,000

Retained earnings                                      31,000          55,000

Total liabilities and stockholders' equity        $209,000       $195,000

Additional information:

1. Net loss for 2017 is $20,000.

2. Land was sold for cash at a loss of $10,000. This was the only land transaction during the year.

3. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.

4. $12,000 of bonds was retired during the year at carrying (book) value.

5. Equipment was acquired for common stock. The fair market value of the stock at the time of the exchange was $25,000.

Instructions:

1. Prepare Operating Activities for SCF, using Indirect Method.

2. Using the data above prepared a correct form the classified balance sheet for 2017.