Problem Four

A comparative balance sheet for Roxanne Company is presented below:

Comparative Balance Sheet

2017 2016

Assets

Cash$39,000$31,000

Accounts receivable (net)80,00060,000

Prepaid insurance22,00017,000

Land18,00040,000

Equipment70,00060,000

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

Total Assets$209,000$195,000

Liabilities and Stockholders' Equity

Accounts payable$11,000$6,000

Bonds payable27,00019,000

Common stock140,000115,000

Retained earnings31,00055,000

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.