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, 2021 Assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity $ 80,000 140,000 75,000 140,000 50,000 $ 485,000 $ 90,000 25,000 95,000 130,000 145,000 $ 485,000 Additional Information: 1. Cash includes a $40,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $230,000. 3. Accounts receivable includes a $40,000 notes receivable from a customer due in 2024. 4. The notes payable balance includes accrued interest of $25,000. Principal and interest are both due on February 1, 2022. 5. The company began operations in 2016. Net income less dividends since inception of the company totals $55,000. 6. 70,000 shares of no par common stock were issued in 2016. 200,000 shares are authorized. LOS GATOS CORPORATION Balance Sheet At December 31, 2021 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. (Amounts to be deducted should be indicated by a minus sign.) Answer is not complete.
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, 2021 Assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity $ 80,000 140,000 75,000 140,000 50,000 $ 485,000 $ 90,000 25,000 95,000 130,000 145,000 $ 485,000 Additional Information: 1. Cash includes a $40,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $230,000. 3. Accounts receivable includes a $40,000 notes receivable from a customer due in 2024. 4. The notes payable balance includes accrued interest of $25,000. Principal and interest are both due on February 1, 2022. 5. The company began operations in 2016. Net income less dividends since inception of the company totals $55,000. 6. 70,000 shares of no par common stock were issued in 2016. 200,000 shares are authorized. LOS GATOS CORPORATION Balance Sheet At December 31, 2021 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. (Amounts to be deducted should be indicated by a minus sign.) Answer is not complete.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, 2021
Assets
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
Notes payable
Bonds payable
Shareholders' equity
Total liabilities and shareholders' equity
$ 80,000
140,000
75,000
140,000
50,000
$ 485,000
$ 90,000
25,000
95,000
130,000
145,000
$ 485,000
Additional Information:
1. Cash includes a $40,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $230,000.
3. Accounts receivable includes a $40,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $25,000. Principal and interest are both due on February 1, 2022.
5. The company began operations in 2016. Net income less dividends since inception of the company totals $55,000.
6. 70,000 shares of no par common stock were issued in 2016. 200,000 shares are authorized.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
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. (Amounts to be deducted should be
indicated by a minus sign.)
Answer is not complete.
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