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  3. the following balance sheet for the los gatos corporation was...

Question: the following balance sheet for the los gatos corporation was...

Question details

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, 2018
Assets
Cash $ 76,000
Accounts receivable 134,000
Inventories 73,000
Machinery (net) 138,000
Franchise (net) 48,000
Total assets $ 469,000
Liabilities and Shareholders’ Equity
Accounts payable $ 86,000
Allowance for uncollectible accounts 23,000
Note payable 91,000
Bonds payable 128,000
Shareholders’ equity 141,000
Total liabilities and shareholders’ equity $ 469,000


Additional information:

  1. Cash includes a $38,000 restricted amount to be used for repayment of the bonds payable in 2022.
  2. The cost of the machinery is $226,000.
  3. Accounts receivable includes a $38,000 note receivable from a customer due in 2021.
  4. The note payable includes accrued interest of $23,000. Principal and interest are both due on February 1, 2019.
  5. The company began operations in 2013. Income less dividends since inception of the company totals $53,000.
  6. 68,000 shares of no par common stock were issued in 2013. 100,000 shares are authorized.

Required:
Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

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