The 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, 2024 Assets Cash $ 50,000 Accounts receivable 95,000 Inventory 60,000 Machinery (net) 125,000 Franchise (net) 35,000 Total assets $365,000 Liabilities and Shareholders' Equity Accounts payable $ 60,000 Allowance for uncollectible accounts 10,000 Notes payable 65,000 Bonds payable 115,000 Shareholders' equity 115,000 Total liabilities and shareholders' equity S 365,000 Additional Information: Cash includes a $25,000 restricted amount to be used for repayment of the bonds payable in 2028. The cost of the machinery is $200,000. Accounts receivable includes a $25,000 notes receivable from a customer due in 2027. The notes payable balance includes accrued interest of $10,000. Principal and interest are both due on February 1, 2025. The company began operations in 2019. Net income less dividends since inception of the company totals $40,000. 55,000 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.
The 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, 2024 Assets Cash $ 50,000 Accounts receivable 95,000 Inventory 60,000 Machinery (net) 125,000 Franchise (net) 35,000 Total assets $365,000 Liabilities and Shareholders' Equity Accounts payable $ 60,000 Allowance for uncollectible accounts 10,000 Notes payable 65,000 Bonds payable 115,000 Shareholders' equity 115,000 Total liabilities and shareholders' equity S 365,000 Additional Information: Cash includes a $25,000 restricted amount to be used for repayment of the bonds payable in 2028. The cost of the machinery is $200,000. Accounts receivable includes a $25,000 notes receivable from a customer due in 2027. The notes payable balance includes accrued interest of $10,000. Principal and interest are both due on February 1, 2025. The company began operations in 2019. Net income less dividends since inception of the company totals $40,000. 55,000 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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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.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2024
Assets
Cash $ 50,000
Accounts receivable 95,000
Inventory 60,000
Machinery (net) 125,000
Franchise (net) 35,000
Total assets $365,000
Liabilities and Shareholders' Equity
Accounts payable $ 60,000
Allowance for uncollectible accounts 10,000
Notes payable 65,000
Bonds payable 115,000
Shareholders' equity 115,000
Total liabilities and shareholders' equity S 365,000
Additional Information:
Cash includes a $25,000 restricted amount to be used for repayment of the bonds payable in 2028.
The cost of the machinery is $200,000.
Accounts receivable includes a $25,000 notes receivable from a customer due in 2027.
The notes payable balance includes accrued interest of $10,000. Principal and interest are both due on February 1, 2025.
The company began operations in 2019. Net income less dividends since inception of the company totals $40,000.
55,000 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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