Question
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
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, 2016 | |||
Assets | |||
Cash | $ | 58,000 | |
Accounts receivable | 107,000 | ||
Inventories | 64,000 | ||
Machinery (net) | 129,000 | ||
Franchise (net) | 39,000 | ||
Total assets | $ | 397,000 | |
Liabilities and Shareholders Equity | |||
Accounts payable | $ | 68,000 | |
Allowance for uncollectible accounts | 14,000 | ||
Note payable | 73,000 | ||
Bonds payable | 119,000 | ||
Shareholders equity | 123,000 | ||
Total liabilities and shareholders equity | $ | 397,000 | |
Additional information: |
1. | Cash includes a $29,000 restricted amount to be used for repayment of the bonds payable in 2020. |
2. | The cost of the machinery is $208,000. |
3. | Accounts receivable includes a $29,000 note receivable from a customer due in 2019. |
4. | The note payable includes accrued interest of $14,000. Principal and interest are both due on February 1, 2017. |
5. | The company began operations in 2011. Income less dividends since inception of the company totals $44,000. |
6. | 59,000 shares of no par common stock were issued in 2011. 100,000 shares are authorized. |
Required: |
Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) |
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