Exercise 3-7 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, 2018
Assets
Cash	$	52,000
Accounts receivable		98,000
Inventories		61,000
Machinery (net)		126,000
Franchise (net)		36,000
Total assets	$	373,000
Liabilities and Shareholders Equity
Accounts payable	$	62,000
Allowance for uncollectible accounts		11,000
Note payable		67,000
Bonds payable		116,000
Shareholders equity		117,000
Total liabilities and shareholders equity	$	373,000

Additional information:

Cash includes a $26,000 restricted amount to be used for repayment of the bonds payable in 2022.

The cost of the machinery is $202,000.

Accounts receivable includes a $26,000 note receivable from a customer due in 2021.

The note payable includes accrued interest of $11,000. Principal and interest are both due on February 1, 2019.

The company began operations in 2013. Income less dividends since inception of the company totals $41,000.

56,000 shares of no par common stock were issued in 2013. 100,000 shares are authorized.

Required: Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) it is asking you to correct the balance sheet with the given additional information.