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, 2018 | |||
Assets | |||
Cash | $ | 48,000 | |
Accounts receivable | 92,000 | ||
Inventories | 59,000 | ||
Machinery (net) | 124,000 | ||
Franchise (net) | 34,000 | ||
Total assets | $ | 357,000 | |
Liabilities and Shareholders Equity | |||
Accounts payable | $ | 58,000 | |
Allowance for uncollectible accounts | 9,000 | ||
Note payable | 63,000 | ||
Bonds payable | 114,000 | ||
Shareholders equity | 113,000 | ||
Total liabilities and shareholders equity | $ | 357,000 | |
Additional information:
Cash includes a $24,000 restricted amount to be used for repayment of the bonds payable in 2022.
The cost of the machinery is $198,000.
Accounts receivable includes a $24,000 note receivable from a customer due in 2021.
The note payable includes accrued interest of $9,000. 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 $39,000.
54,000 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.)
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