The following balance sheet for the Los Gatos Corporation was


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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, 2016 Assets Cash $ 40,000 Accounts receivable 80,000 Inventories 55,000 Machinery (net) 120,000 Franchise (net) 30,000 Total assets $ 325,000 Liabilities and Shareholders’ Equity Accounts payable $ 50,000 Allowance for uncollectible accounts 5,000 Note payable 55,000 Bonds payable 110,000 Shareholders’ equity 105,000 Total liabilities and shareholders’ equity $ 325,000 Additional information: 1. Cash includes a $20,000 restricted amount to be used for repayment of the bonds payable in 2020. 2. The cost of the machinery is $190,000. 3. Accounts receivable includes a $20,000 note receivable from a customer due in 2019. 4. The note payable includes accrued interest of $5,000. Principal and interest are both due on February 1, 2017. 5. The company began operations in 2011. Income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2011. 100,000 shares are authorized. Required: Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) mapowers3
posted a question · Feb 12, 2016 at 10:21pm

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