Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3] The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity $ 60,000 110,000 65,000 130,000 40,000 $ 405,000 $ 70,000 15,000 75,000 120,000 125,000 $405,000 Additional Information: 1. Cash includes a $30,000 restricted amount to be used for repayment of the bonds payable in 2028, 2. The cost of the machinery is $210,000. 3. Accounts receivable includes a $30,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $15,000. Principal and interest are both due on February 1, 2025. 5. The company began operations in 2019. Net income less dividends since inception of the company totals $45,000. 6. 60,000 shares of no par common stock were issued in 2019. 200,000 shares are authorized.