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. LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity $ 76,000 134,000 73,000 138,000 48,000 $ 469,000 $ 86,000 23,000 91,000 128,000 141,000 $ 469,000 Additional Information: 1. Cash includes a $38,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $226,000. 3. Accounts receivable includes a $38,000 notes receivable from customer due in 2024. 4. The notes payable balance includes accrued interest of $23,000. Principal and interest are both due on February 1, 2022. 5. The company began operations in 2016. Net income less dividends since inception of the company totals $53,000. 6. 68,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized. Required: Prepare a corrected, classified balance sheet. Use the additional information to help determine appropriate classifications and account balances. The cost of machinery and its accumulated depreciation are shown separately. (Amounts to be deducted should be indicated by a minus sign.) LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Current assets: Net accounts receivable 0 0 Total current assets Investments: 0 Total investments Property, plant, and equipment: 0 Net property, plant, and equipment Intangible assets: Total assets 0 Liabilities and Shareholders' Equity Current liabilities: Total current liabilities Long-term liabilities: Total liabilities Shareholders' equity: Total shareholders' equity Total liabilities and shareholders' equity