Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following baiance sheet for the Los Gatos Corporation was prepared by a recently hired accountant, In reviewing the statement you notice several errors. Additional

image text in transcribed
image text in transcribed
image text in transcribed
The following baiance sheet for the Los Gatos Corporation was prepared by a recently hired accountant, In reviewing the statement you notice several errors. Additional information: 1. Cosh includes in $20,000 restricted amount to be used for ropayment of the bonds payabie in 2028 . 2. The cost of the machinery is $190,000. 3. Accounts recelvable includes a $20,000 notes receivable from a customer due in 2027. 4. The notes poyable balance includes accrued interest of $5,000. 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 $35,000. 6. 50,000 shares of no par common stock were issued in 2019.100,000 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 depreclation are shown separately. Note: Amounts to be deducted should be indicated by a minus sign. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|l|}{ Current assets: } \\ \hline Cash & & & $ & 20,000 \\ \hline Accounts receivable & $ & 60,000 & & \\ \hline Allowance for uncollectible accounts & & (5,000) & & \\ \hline Net accounts receivable & & & & 55,000 \\ \hline & & & & \\ \hline Total current assets & & & & 75,000 \\ \hline \multicolumn{5}{|l|}{ Investments: } \\ \hline Notes receivable & & & & 20,000 \\ \hline \multicolumn{5}{|l|}{ Property, plant, and equipment: } \\ \hline & & & & \\ \hline & & & & \\ \hline Net property, plant, and equipment & & & & 0 \\ \hline \multicolumn{5}{|l|}{ Intangible assets: } \\ \hline & & & & \\ \hline \multicolumn{5}{|l|}{ Other assets: } \\ \hline & & & & \\ \hline & & & & \\ \hline Total assets & & & $ & 95,000 \\ \hline \end{tabular} Liabilities and Shareholders' Equity \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|l|}{ Other assets: } \\ \hline \multicolumn{3}{|l|}{ C } \\ \hline \multicolumn{3}{|l|}{7} \\ \hline Total assets & $ & 95,000 \\ \hline \multicolumn{3}{|c|}{ Liabilities and Shareholders' Equity } \\ \hline \multicolumn{3}{|l|}{ Current liabilities: } \\ \hline \multicolumn{3}{|l|}{7} \\ \hline \multicolumn{3}{|l|}{5} \\ \hline \multicolumn{3}{|l|}{4.} \\ \hline Total current liabilities & & 0 \\ \hline \multicolumn{3}{|l|}{ Long-term liabilities: } \\ \hline \multicolumn{3}{|l|}{ E } \\ \hline \multicolumn{3}{|l|}{p} \\ \hline Total liabilities & & 0 \\ \hline \multicolumn{3}{|l|}{ Shareholders' equity: } \\ \hline \multicolumn{3}{|l|}{ P } \\ \hline \\ \hline \\ \hline Total shareholders' equity & & 0 \\ \hline Total liabilities and shareholders' equity & $ & 0 \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The TL 9000 Guide For Auditors

Authors: Mark Kempf

1st Edition

087389510X, 978-0873895101

More Books

Students also viewed these Accounting questions