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, 2021 |
Assets |
Cash |
$ |
52,000 |
|
Accounts receivable |
|
98,000 |
|
Inventory |
|
61,000 |
|
Machinery (net) |
|
126,000 |
|
Franchise (net) |
|
36,000 |
|
Total assets |
$ |
373,000 |
|
Liabilities and Shareholders’
Equity |
Accounts payable |
$ |
62,000 |
|
Allowance for uncollectible accounts |
|
11,000 |
|
Notes payable |
|
67,000 |
|
Bonds payable |
|
116,000 |
|
Shareholders’ equity |
|
117,000 |
|
Total liabilities and shareholders’ equity |
$ |
373,000 |
|
|
Additional Information:
- Cash includes a $26,000 restricted amount to be used for
repayment of the bonds payable in 2025.
- The cost of the machinery is $202,000.
- Accounts receivable includes a $26,000 notes receivable from a
customer due in 2024.
- The notes payable balance includes accrued interest of $11,000.
Principal and interest are both due on February 1, 2022.
- The company began operations in 2016. Net income less dividends
since inception of the company totals $41,000.
- 56,000 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.)
Answer is not complete.
|
|
LOS GATOS CORPORATION |
Balance Sheet |
At December 31, 2021 |
Assets |
Current assets: |
|
|
Cashselected answer correct |
|
$26,000selected answer correct |
Accounts receivableselected answer
correct |
$72,000selected answer correct |
|
Allowance for uncollectible
accountsselected answer correct |
(11,000)selected answer correct |
|
Net accounts receivable |
|
61,000 |
Inventoryselected answer correct |
|
61,000selected answer correct |
Total current assets |
|
148,000 |
Investments: |
|
|
Notes receivableselected answer
correct |
$26,000selected answer correct |
|
Retained earningsselected answer
incorrect |
not attempted |
|
not attempted |
0selected answer correct |
|
Total investments |
|
26,000 |
Property, plant, and equipment: |
|
|
not attempted |
not attempted |
|
not attempted |
not attempted |
|
Net property, plant, and equipment |
|
0 |
Intangible assets: |
|
|
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
Total assets |
|
$174,000 |
Liabilities and Shareholders'
Equity |
Current liabilities: |
|
|
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
Total current liabilities |
|
0 |
Long-term liabilities: |
|
|
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
not attempted |
Total liabilities |
|
0 |
Shareholders’ equity: |
|
|
not attempted |
not attempted |
|
not attempted |
not attempted |
|
not attempted |
not attempted |
|
Total shareholders’ equity |
|
0 |
Total liabilities and shareholders’
equity |
|
$0 |
|