Required: Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) LOS GATOS CORPORATION Balance Sheet At December 31, 2018

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 10PA: Elegant Universal uses the balance sheet aging method to account for uncollectible debt on...
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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 $ 66,000
Accounts receivable 119,000
Inventories 68,000
Machinery (net) 133,000
Franchise (net) 43,000
Total assets $ 429,000
Liabilities and Shareholders’ Equity
Accounts payable $ 76,000
Allowance for uncollectible accounts 18,000
Note payable 81,000
Bonds payable 123,000
Shareholders’ equity 131,000
Total liabilities and shareholders’ equity $ 429,000

Additional information:

Cash includes a $33,000 restricted amount to be used for repayment of the bonds payable in 2022.
The cost of the machinery is $216,000.
Accounts receivable includes a $33,000 note receivable from a customer due in 2021.
The note payable includes accrued interest of $18,000. Principal and interest are both due on February 1, 2019.
The company began operations in 2013. Income less dividends since inception of the company totals $48,000.
63,000 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.)

Required:
Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2018
Transcribed Image Text:Required: Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) LOS GATOS CORPORATION Balance Sheet At December 31, 2018
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