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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 Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity Additional Information: $ 60,000 110,000 65,000 130,000 40,000 $ 405,000 $ 70,000 15,000 75,000 120,000 125,000 $ 405,000

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 Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity Additional Information: $ 60,000 110,000 65,000 130,000 40,000 $ 405,000 $ 70,000 15,000 75,000 120,000 125,000 $ 405,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Current assets: Cash Accounts receivable Allowance for uncollectible accounts Net accounts receivable Inventory Total current assets Investments: Restricted cash Notes receivable Property, plant, and equipment: Machinery Accumulated depreciation Net property, plant, and equipment Intangible assets: Franchise (net) Other assets: Total assets Current liabilities: LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Accounts payable Interest payable Notes payable Long-term liabilities: Bonds payable Total current liabilities Total liabilities Shareholders' equity. Common stock Retained earnings 333 O 00 O O X S 333 Liabilities and Shareholders' Equity 3 80,000 (15,000) 00 210,000✔ (80,000) $ 80,000✔ 45,000 $ 30,000 65,000 65,000 160,000 30,000 30,000 130,000 40,000 $ 390,000 $ 70,000✔ 15,000 60,000 145,000 120,000 X 265,000 00 Total shareholders' equity 125,000 390,000 Total liabilities and shareholders' equity Red text indicates no response was expected in a cell or a formula-based calculation is incorrect, he points deducted
Transcribed Image Text:Current assets: Cash Accounts receivable Allowance for uncollectible accounts Net accounts receivable Inventory Total current assets Investments: Restricted cash Notes receivable Property, plant, and equipment: Machinery Accumulated depreciation Net property, plant, and equipment Intangible assets: Franchise (net) Other assets: Total assets Current liabilities: LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Accounts payable Interest payable Notes payable Long-term liabilities: Bonds payable Total current liabilities Total liabilities Shareholders' equity. Common stock Retained earnings 333 O 00 O O X S 333 Liabilities and Shareholders' Equity 3 80,000 (15,000) 00 210,000✔ (80,000) $ 80,000✔ 45,000 $ 30,000 65,000 65,000 160,000 30,000 30,000 130,000 40,000 $ 390,000 $ 70,000✔ 15,000 60,000 145,000 120,000 X 265,000 00 Total shareholders' equity 125,000 390,000 Total liabilities and shareholders' equity Red text indicates no response was expected in a cell or a formula-based calculation is incorrect, he points deducted
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 Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders equity $ 60,000 110,000 65,000 130,000 40,000 $ 405,000 $ 70,000 15,000 75,000 120,000 125,000 $ 405,000 Additional Information: 1. Cash includes a $30,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $210,000. 3. Accounts receivable includes a $30,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $15,000. 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 $45,000. 6.60,000 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.
Transcribed Image Text: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 Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders equity $ 60,000 110,000 65,000 130,000 40,000 $ 405,000 $ 70,000 15,000 75,000 120,000 125,000 $ 405,000 Additional Information: 1. Cash includes a $30,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $210,000. 3. Accounts receivable includes a $30,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $15,000. 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 $45,000. 6.60,000 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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