he 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, 2013 Assets Cash $ 43,000 Accounts receivable 77,000 Inventories 58,000 Machinery (net) 150,000 Franchise (net) 33,000 Total assets $ 361,000 Liabilities and Shareholders’ Equity Accounts payable $ 53,000 Allowance for uncollectible accounts 8,000 Note payable 61,000 Bonds payable 125,000 Shareholders’ equity 114,000 Total liabilities and shareholders’ equity $ 361,000 Additional information: 1. Cash includes a $14,000 bond sinking fund to be used for repayment of the bonds payable in 2017. 2. The cost of the machinery is $170,000. 3. Accounts receivable includes a $12,000 note receivable from a customer due in 2016. 4. The note payable includes accrued interest of $8,000. Principal and interest are both due on February 1, 2014. 5. The company began operations in 2008. Income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2008. 100,000 shares are authorized. Required: Prepare a corrected, classified balance sheet.
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