Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3] The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Shareholders' equity Total liabilities and shareholders' equity $ 68,000 122,000 69,000 134,000 44,000 $ 437,000 $ 78,000 19,000 83,000 124,000 133,000 $ 437,000 Additional Information: 1. Cash includes a $34,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $218,000. 3. Accounts receivable includes a $34,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $19,000. Principal and interest are both due on February 1, 2025 5. The company began operations in 2019. Net Income less dividends since inception of the company totals $49,000. 6.64,000 shares of no par common stock were issued in 2019. 200,000 shares are authorized. Required: Prepare a corrected, classified balance sheet. Use the additional Information to help determine appropriate classifications and account balances. The cost of machinery and its accumulated depreciation are shown separately. Note: Amounts to be deducted should be indicated by a minus sign.
Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3] The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Shareholders' equity Total liabilities and shareholders' equity $ 68,000 122,000 69,000 134,000 44,000 $ 437,000 $ 78,000 19,000 83,000 124,000 133,000 $ 437,000 Additional Information: 1. Cash includes a $34,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $218,000. 3. Accounts receivable includes a $34,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $19,000. Principal and interest are both due on February 1, 2025 5. The company began operations in 2019. Net Income less dividends since inception of the company totals $49,000. 6.64,000 shares of no par common stock were issued in 2019. 200,000 shares are authorized. Required: Prepare a corrected, classified balance sheet. Use the additional Information to help determine appropriate classifications and account balances. The cost of machinery and its accumulated depreciation are shown separately. Note: Amounts to be deducted should be indicated by a minus sign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
Transcribed Image Text:Current assets
Nel accounts receivable
Total current assets
Investments:
Property, plant, and equipment
Net property, plant, and equipment
Intangible assets
Other assets
Total assets
Current liabilities:
LOS GATOS CORPORATION
Balance sheet
At December 31, 2024
Assets
Tatal current liabilities
Long-term liabilities:
Total abilities
Shareholders equity
Liabilities and Shareholders Equity
Total shareholders equity
Total liabilities and shareholders' equity
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0
0
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![Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3]
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement
you notice several errors.
Cash
Accounts receivable
Inventory
Machinery (net)
Franchise (net)
Total assets
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2024
Assets
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
Shareholders' equity.
Total liabilities and shareholders' equity
$ 68,000
122,000
69,000
134,000
44,000
$ 437,000
$ 78,000
19,000
83,000
124,000
133,000
$ 437,000
Additional Information:
1. Cash includes a $34,000 restricted amount to be used for repayment of the bonds payable in 2028.
2. The cost of the machinery is $218,000.
3. Accounts receivable includes a $34,000 notes receivable from a customer due in 2027.
4. The notes payable balance includes accrued Interest of $19,000. Principal and interest are both due on February 1, 2025.
5. The company began operations in 2019. Net Income less dividends since inception of the company totals $49,000.
6.64,000 shares of no par common stock were issued in 2019. 200,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. Use the additional information to help determine appropriate classifications and account
balances. The cost of machinery and its accumulated depreciation are shown separately.
Note: Amounts to be deducted should be indicated by a minus sign.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe48b91ac-d128-464b-9c87-7d3008e2bbca%2Febd88580-1ca1-482d-96fa-126e55a3de32%2Fnvbybyl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3]
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement
you notice several errors.
Cash
Accounts receivable
Inventory
Machinery (net)
Franchise (net)
Total assets
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2024
Assets
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
Shareholders' equity.
Total liabilities and shareholders' equity
$ 68,000
122,000
69,000
134,000
44,000
$ 437,000
$ 78,000
19,000
83,000
124,000
133,000
$ 437,000
Additional Information:
1. Cash includes a $34,000 restricted amount to be used for repayment of the bonds payable in 2028.
2. The cost of the machinery is $218,000.
3. Accounts receivable includes a $34,000 notes receivable from a customer due in 2027.
4. The notes payable balance includes accrued Interest of $19,000. Principal and interest are both due on February 1, 2025.
5. The company began operations in 2019. Net Income less dividends since inception of the company totals $49,000.
6.64,000 shares of no par common stock were issued in 2019. 200,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. Use the additional information to help determine appropriate classifications and account
balances. The cost of machinery and its accumulated depreciation are shown separately.
Note: Amounts to be deducted should be indicated by a minus sign.
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