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 $ 44,ᎾᎾᎾ 86,000 57,000 122,000 32,000 $ 341,000 $ 54,000 7,000 59,000 112,000 109,000 $ 341,000 Additional Information: 1. Cash includes a $22,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $194,000. 3. Accounts receivable includes a $22,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $7,000. 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 $37,000.
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 Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Shareholders' equity Total liabilities and shareholders' equity $ 44,ᎾᎾᎾ 86,000 57,000 122,000 32,000 $ 341,000 $ 54,000 7,000 59,000 112,000 109,000 $ 341,000 Additional Information: 1. Cash includes a $22,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $194,000. 3. Accounts receivable includes a $22,000 notes receivable from a customer due in 2027. 4. The notes payable balance includes accrued interest of $7,000. 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 $37,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
Shareholders' equity
Total liabilities and shareholders' equity
$ 44,000
86,000
57,000
122,000
32,000
$ 341,000
$ 54,000
7,000
59,000
112,000
109,000
$ 341,000
Additional Information:
1. Cash includes a $22,000 restricted amount to be used for repayment of the bonds payable in 2028.
2. The cost of the machinery is $194,000.
3. Accounts receivable includes a $22,000 notes receivable from a customer due in 2027.
4. The notes payable balance includes accrued interest of $7,000. 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 $37,000.
Transcribed Image Text:Current assets:
Net 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
Total current liabilities
Long-term liabilities
Total liabilities
Shareholders' equity
Liabilities and Shareholders' Equity
Total shareholders' equity
Total liabilities and shareholders' equity
$
$
0
0
oo
0
0
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