Los Gatos Corporation Assignment | Top Universities
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 | $ | 60,000 | |
| Accounts receivable | 110,000 | ||
| Inventory | 65,000 | ||
| Machinery (net) | 130,000 | ||
| Franchise (net) | 40,000 | ||
| Total assets | $ | 405,000 | |
| Liabilities and Shareholders’ Equity | |||
| Accounts payable | $ | 70,000 | |
| Allowance for uncollectible accounts | 15,000 | ||
| Notes payable | 75,000 | ||
| Bonds payable | 120,000 | ||
| Shareholders’ equity | 125,000 | ||
| Total liabilities and shareholders’ equity | $ | 405,000 | |
Additional Information:
- Cash includes a $30,000 restricted amount to be used for repayment of the bonds payable in 2025.
- The cost of the machinery is $210,000.
- Accounts receivable includes a $30,000 notes receivable from a customer due in 2024.
- The notes payable balance includes accrued interest of $15,000. 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 $45,000.
- 60,000 shares of no par common stock were issued in 2016. 200,000 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.)
LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Current assets: 30,000 Cash S Accounts receivable S 80,000 Allowance for uncollectible accounts (15,000) Net accounts receivable 65,000 Inventory 65,000 Total current assets 160,000 Investments: Restricted cash S 30,000 Total investments 30,000 Property, plant, and equipment: 210,000 Machinery Accumulated depreciation (80,000) Net property, plant, and equipment 130,000 Intangible assets: Franchise (net) 40,000 Total assets 380,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable 70,000 S Notes payable 60,000 Interest payable 15,000 Total current liabilities 145,000 Long-term liabilities: Bonds payable 120,000 Total liabilities 265,000 Shareholders equity: 80,000 Common stock S Retained earnings 45,000 Total shareholders equity 125,000 390,000 Total liabilities and shareholders' equity S. Get Accounting homework help today
