Question
In: Accounting
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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 | $ | 72,000 | |
| Accounts receivable | 128,000 | ||
| Inventories | 71,000 | ||
| Machinery (net) | 136,000 | ||
| Franchise (net) | 46,000 | ||
| Total assets | $ | 453,000 | |
| Liabilities and Shareholders’ Equity | |||
| Accounts payable | $ | 82,000 | |
| Allowance for uncollectible accounts | 21,000 | ||
| Note payable | 87,000 | ||
| Bonds payable | 126,000 | ||
| Shareholders’ equity | 137,000 | ||
| Total liabilities and shareholders’ equity | $ | 453,000 | |
Additional information:
Cash includes a $36,000 restricted amount to be used for repayment of the bonds payable in 2022.
The cost of the machinery is $222,000.
Accounts receivable includes a $36,000 note receivable from a customer due in 2021.
The note payable includes accrued interest of $21,000. 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 $51,000.
66,000 shares of no par common stock were issued in 2013. 200,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. (Amounts to
be deducted should be indicated by a minus sign.)
Solutions
Expert Solution
| LOS GATOS CORPORATION | ||
| Balance Sheet | ||
| At December 31, 2018 | ||
| Assets | ||
| Curent Assets | ||
| Cash (72000-36000) | $36,000 | |
| Accounts Receivable (net) | $71,000 | |
| (128000-36000-21000) | ||
| Inventories | $71,000 | |
| Total Current Assets | $178,000 | |
| Investments | ||
| Restricted Cash | $36,000 | |
| Note Receivable | $36,000 | |
| Total Investments | $72,000 | |
| Property,Plant & Equipment | ||
| Machinery | $222,000 | |
| Less: Accumulated
Depriciation ($222000-136000) |
$86,000 | |
| Net property, plant, and equipment | $136,000 | |
| Intangible Assets | ||
| Franchise (Net) | $46,000 | |
| Total Assets | $432,000 | |
| Liabilities and Shareholders' Equity | ||
| Current liabilities | ||
| Accounts payable | $82,000 | |
| Interest payable | $21,000 | |
| Note payable (87000-21000) | $66,000 | |
| Total current liabilities | $169,000 | |
| Longterm liabilities | ||
| Bonds payable | $126,000 | |
| Shareholders' equity | ||
| Common stock (137000-51000) | $86,000 | |
| Retained earnings | $51,000 | |
| Total Shareholder's equity | $137,000 | |
| Total Liabilities and Shareholders' Equity | $432,000 | |
ekkarill92 answered 1 year agoRelated Solutions
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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
$
78,000
Accounts
receivable
137,000
Inventories
74,000
Machinery
(net)
139,000
Franchise
(net)
49,000
Total
assets
$
477,000
Liabilities
and Shareholders’ Equity
Accounts
payable
$
88,000
Allowance for
uncollectible accounts
24,000
Note
payable
93,000
Bonds
payable
129,000
Shareholders’
equity
143,000
Total
liabilities and shareholders’ equity
$...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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, 2021
Assets
Cash
$
78,000
Accounts receivable
137,000
Inventory
74,000
Machinery (net)
139,000
Franchise (net)
49,000
Total assets
$
477,000
Liabilities and Shareholders’
Equity
Accounts payable
$
88,000
Allowance for uncollectible accounts
24,000
Notes payable
93,000
Bonds payable
129,000
Shareholders’ equity
143,000
Total liabilities and shareholders’ equity
$...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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
$
74,000
Accounts
receivable
131,000
Inventories
72,000
Machinery
(net)
137,000
Franchise
(net)
47,000
Total
assets
$
461,000
Liabilities
and Shareholders’ Equity
Accounts
payable
$
84,000
Allowance for
uncollectible accounts
22,000
Note
payable
89,000
Bonds
payable
127,000
Shareholders’
equity
139,000
Total
liabilities and shareholders’ equity
$...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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 $ 70,000 Accounts receivable 125,000
Inventories 70,000 Machinery (net) 135,000 Franchise (net) 45,000
Total assets $ 445,000 Liabilities and Shareholders’ Equity
Accounts payable $ 80,000 Allowance for uncollectible accounts
20,000 Note payable 85,000 Bonds payable 125,000 Shareholders’
equity 135,000 Total liabilities and shareholders’ equity $...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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
$...
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant....
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
$...
The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance...
The following balance sheet for the Hubbard Corporation was
prepared by the company:
HUBBARD CORPORATION
Balance Sheet
At December 31, 2021
Assets
Buildings
$
752,000
Land
256,000
Cash
62,000
Accounts receivable (net)
124,000
Inventory
244,000
Machinery
282,000
Patent (net)
102,000
Investment in equity securities
64,000
Total assets
$
1,886,000
Liabilities and Shareholders'
Equity
Accounts payable
$
217,000
Accumulated depreciation
257,000
Notes payable
504,000
Appreciation of inventory
82,000
Common stock (authorized and issued
102,000 shares of no par stock)
408,000
Retained...
The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance...
The following balance sheet for the Hubbard Corporation was
prepared by the company:
HUBBARD CORPORATION
Balance Sheet
At December 31, 2021
Assets
Buildings
$
768,000
Land
304,000
Cash
78,000
Accounts receivable (net)
156,000
Inventory
276,000
Machinery
298,000
Patent (net)
118,000
Investment in equity securities
96,000
Total assets
$
2,094,000
Liabilities and Shareholders'
Equity
Accounts payable
$
233,000
Accumulated depreciation
273,000
Notes payable
536,000
Appreciation of inventory
98,000
Common stock (authorized and issued
118,000 shares of no par stock)
472,000
Retained...
The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance...
The following balance sheet for the Hubbard Corporation was
prepared by the company:
HUBBARD CORPORATION
Balance Sheet
At
December 31, 2018
Assets
Buildings
$
760,000
Land
280,000
Cash
70,000
Accounts receivable (net)
140,000
Inventories
260,000
Machinery
290,000
Patent (net)
110,000
Investment in marketable equity
securities
80,000
Total assets
$
1,990,000
Liabilities and Shareholders' Equity
Accounts payable
$
225,000
Accumulated depreciation
265,000
Notes payable
520,000
Appreciation of inventories
90,000
Common stock, authorized and
issued
110,000 shares of no par stock
440,000...
The following balance sheet has been prepared by the accountant for Limestone Company as of June...
The following balance sheet has been prepared by the accountant
for Limestone Company as of June 3, 2017, the date on which the
company is to file a voluntary petition of bankruptcy:
LIMESTONE COMPANY
Balance Sheet
June 3, 2017
Assets
Cash
$
12,000
Accounts receivable (net)
74,000
Inventory
106,000
Land
109,000
Buildings (net)
309,000
Equipment (net)
198,000
Total assets
$
808,000
Liabilities and Equities
Accounts payable
$
116,000
Notes payable—current (secured by equipment)
268,000
Notes payable—long term (secured by land...
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