Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3] 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 Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Shareholders' equity Total liabilities and shareholders' equity Current assets: Cash Accounts receivable Additional Information: 1. Cash includes a $29,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $208,000. 3. Accounts receivable includes a $29,000 notes receivable from a customer due in 2024. Net accounts receivable 58,000 107,000 64,000 129,000 39,000 $ 397,000 4. The notes payable balance includes accrued interest of $14,000. 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 $44,000. 6.59,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized. 68,000 14,000 73,000 119,000 123,000 $ 397,000 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.) LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets $ $ 78,000 $ 29,000 78,000
Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3] 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 Notes payable Bonds payable Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Shareholders' equity Total liabilities and shareholders' equity Current assets: Cash Accounts receivable Additional Information: 1. Cash includes a $29,000 restricted amount to be used for repayment of the bonds payable in 2025. 2. The cost of the machinery is $208,000. 3. Accounts receivable includes a $29,000 notes receivable from a customer due in 2024. Net accounts receivable 58,000 107,000 64,000 129,000 39,000 $ 397,000 4. The notes payable balance includes accrued interest of $14,000. 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 $44,000. 6.59,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized. 68,000 14,000 73,000 119,000 123,000 $ 397,000 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.) LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets $ $ 78,000 $ 29,000 78,000
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter2: The Basics Of Record Keeping And Financial Statement Preparation: Balance Sheet
Section: Chapter Questions
Problem 18P
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![Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3]
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
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
Assets
Shareholders' equity
Total liabilities and shareholders' equity
Current assets:
Cash
Accounts receivable
Net accounts receivable
$
58,000
107,000
64,000
129,000
39,000
$ 397,000
Additional Information:
1. Cash includes a $29,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $208,000.
3. Accounts receivable includes a $29,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $14,000. 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 $44,000.
6.59,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
Assets
68,000
14,000
73,000
119,000
123,000
$ 397,000
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.)
$
$
78,000
$
29,000
78,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faae49254-63ab-46ff-80f2-ec8d4feafcfa%2Fca3467d3-a6c7-47bf-b106-364f17025596%2Fgnhvamq_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 3-3]
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
Notes payable
Bonds payable
Liabilities and Shareholders' Equity
Accounts payable
Allowance for uncollectible accounts
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
Assets
Shareholders' equity
Total liabilities and shareholders' equity
Current assets:
Cash
Accounts receivable
Net accounts receivable
$
58,000
107,000
64,000
129,000
39,000
$ 397,000
Additional Information:
1. Cash includes a $29,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $208,000.
3. Accounts receivable includes a $29,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $14,000. 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 $44,000.
6.59,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2021
Assets
68,000
14,000
73,000
119,000
123,000
$ 397,000
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.)
$
$
78,000
$
29,000
78,000
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