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 Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Shareholders' equity Total liabilities and shareholders' equity 54,000 101,000 62,000 127,000 37,000 $ 381,000 64,000 12,000 69,000 117,000 119,000 $ 381,000 Additional Information: 1. Cash includes a $27,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $204,000. 3. Accounts receivable includes a $27,000 notes receivable from a customer due in 2024. 4. The notes payable balance includes accrued interest of $12,000. 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 $42,000. 6.57,000 shares of no par common stock were issued in 2016. 100,000 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. (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. Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Shareholders' equity Total liabilities and shareholders' equity 54,000 101,000 62,000 127,000 37,000 $ 381,000 64,000 12,000 69,000 117,000 119,000 $ 381,000 Additional Information: 1. Cash includes a $27,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $204,000. 3. Accounts receivable includes a $27,000 notes receivable from a customer due in 2024. 4. The notes payable balance includes accrued interest of $12,000. 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 $42,000. 6.57,000 shares of no par common stock were issued in 2016. 100,000 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. (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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Question
Ef.1.
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
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
Shareholders' equity
Total liabilities and shareholders' equity
$
54,000
101,000
62,000
127,000
37,000
381,000
64,000
12,000
69,000
117,000
119,000
$ 381,000
Additional Information:
1. Cash includes a $27,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $204,000.
3. Accounts receivable includes a $27,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $12,000. 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 $42,000.
6.57,000 shares of no par common stock were issued in 2016. 100,000 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. (Amounts to be deducted should be
indicated by a minus sign.)
Transcribed Image Text:Current assets:
Net accounts receivable
Total current assets
Investments:
Total investments
Property, plant, and equipment:
Net property, plant, and equipment
Intangible assets:
Total assets
Current liabilities:
Total current liabilities
Long-term liabilities:
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
Assets
Total liabilities
Shareholders' equity:
Liabilities and Shareholders' Equity
Total shareholders' equity
Total liabilities and shareholders' equity
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