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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 $ 74,000
Accounts receivable 131,000
Inventories 72,000
Machinery (net) 137,000
Franchise (net) 47,000
Total assets $ 461,000
Liabilities and Shareholders’ Equity
Accounts payable $ 84,000
Allowance for uncollectible accounts22,000
Note payable 89,000
Bonds payable 127,000
Shareholders’ equity 139,000
Total liabilities and shareholders’ equity $
461,000
Additional information:
Cash includes a $37,000 restricted amount to be used for repayment of the bonds payable in 2022.
The cost of the machinery is $224,000.
Accounts receivable includes a $37,000 note receivable from a customer due in 2021.
The note payable includes accrued interest of $22,000. 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 $52,000.
67,000 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.)

Respuesta :

anthougo

Answer:

Los Gatos Corporation

Corrected, Classified Balance Sheet

LOS GATOS CORPORATION

Balance Sheet

At December 31, 2018

Assets

Current Assets:

Cash                                      $ 37,000

Restricted Cash                      37,000

Accounts receivable 94,000

Allowance for

uncollectibles          22,000   72,000

Inventories                              72,000

Total current assets                                       $218,000

Long-term Assets:

Note receivable                        37,000

Machinery              224,000

Acc. Depreciation    87,000   137,000

Franchise (net)                        47,000

Total long-term assets                                  $221,000

Total assets                                                 $ 439,000

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable $ 84,000

Accrued interest     22,000

Note payable           67,000

Total current liabilities                                 $173,000

Long-term liabilities

Bonds payable                                               127,000

Shareholders’ equity

Common Stock, 100,000 authorized

67,000 shares of no par issued 87,000

Retained earnings                      52,000      139,000

Total liabilities and shareholders’ equity $ 439,000

Explanation:

a) Data and Calculations:

LOS GATOS CORPORATION

Balance Sheet

At December 31, 2018

Assets

Cash                        $ 74,000

Accounts receivable 131,000

Inventories                72,000

Machinery (net)        137,000

Franchise (net)          47,000  

Total assets          $ 461,000

Liabilities and Shareholders’ Equity

Accounts payable $ 84,000

Allowance for

uncollectibles         22,000

Note payable           89,000

Bonds payable       127,000

Shareholders’ equity 139,000

Total liabilities and shareholders’ equity $ 461,000

Adjustment based on additional information:

Cash                                $ 74,000

Bonds Payable restricted  37,000

Cash balance                   $37,000

Machinery (net)        137,000

Cost of machinery  224,000

Acc. Depreciation     87,000

Accounts receivable            131,000

Long-term Note receivable 37,000

Balance                                94,000

Short-term liabilities:

Note payable           89,000

Accrued interest     22,000

Note payable           67,000

Retained earnings = $52,000

Shareholders’ equity 139,000

Retained earnings      52,000

Balance  in equity       87,000

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