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.
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 Accounts receivable Inventories Machinery (net) Franchise (net) Total assets $ 66,000 119,000 68,000 133,000 43,000 $429,000 Liabilities and Shareholders' Equity Accounts payable $ 76,000 Allowance for uncollectible accounts 18,000 Note payable 81,000 Bonds payable 123,000 Shareholders' equity 131,000 Total liabilities and shareholders' equity $429,000 Additional information: 1. Cash includes a $33,000 restricted amount to be used for repayment of the bonds payable in 2022. 2. The cost of the machinery is $216,000. 3. Accounts receivable includes a $33,000 note receivable from a customer due in 2021. 4. The note payable includes accrued interest of $18,000. Principal and interest are both due on February 1, 2019. 5. The company began operations in 2013. Income less dividends since inception of the company totals $48,000. 6. 63,000 shares of no par common stock were issued in 2013. 100,000 shares are authorized. Required: Prepare a corrected, classified balance sheet. Enter amounts in order of liquidity. (Amounts to be deducted should be indicated by a minus sign.)
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