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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 $ 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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Expert Solution

ekkarill92 answered 1 year ago
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