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Exercise 3-7 (Static) Balance sheet preparation; errors [LO3-2, 3-3] 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. The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement Note: Amounts to be deducted should be indicated by a minus sign. you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets $ 40,000 LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity 80,000 55,000 120,000 30,000 $ 325,000 $ 50,000 5,000 55,000 110,000 105,000 $325,000 Additional Information: 1. Cash Includes a $20,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $190,000. 3. Accounts receivable Includes a $20.000 notes receivable from a customer due in 2027. 4. The notes payable balance Includes accrued interest of $5,000. Principal and Interest are both due on February 1, 2025. 5. The company began operations in 2019. Net income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2019. 100,000 shares are authorized. Current assets Net accounts receivable Total current assets ° 0

Exercise 3-7 (Static) Balance sheet preparation; errors [LO3-2, 3-3] 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. The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement Note: Amounts to be deducted should be indicated by a minus sign. you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets $ 40,000 LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity 80,000 55,000 120,000 30,000 $ 325,000 $ 50,000 5,000 55,000 110,000 105,000 $325,000 Additional Information: 1. Cash Includes a $20,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $190,000. 3. Accounts receivable Includes a $20.000 notes receivable from a customer due in 2027. 4. The notes payable balance Includes accrued interest of $5,000. Principal and Interest are both due on February 1, 2025. 5. The company began operations in 2019. Net income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2019. 100,000 shares are authorized. Current assets Net accounts receivable Total current assets ° 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 3-7 (Static) Balance sheet preparation; errors [LO3-2, 3-3] 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. The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement Note: Amounts to be deducted should be indicated by a minus sign. you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets $ 40,000 LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity 80,000 55,000 120,000 30,000 $ 325,000 $ 50,000 5,000 55,000 110,000 105,000 $325,000 Additional Information: 1. Cash Includes a $20,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $190,000. 3. Accounts receivable Includes a $20.000 notes receivable from a customer due in 2027. 4. The notes payable balance Includes accrued interest of $5,000. Principal and Interest are both due on February 1, 2025. 5. The company began operations in 2019. Net income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2019. 100,000 shares are authorized. Current assets Net accounts receivable Total current assets ° 0
Transcribed Image Text:Exercise 3-7 (Static) Balance sheet preparation; errors [LO3-2, 3-3] 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. The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement Note: Amounts to be deducted should be indicated by a minus sign. you notice several errors. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets $ 40,000 LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Cash Accounts receivable Inventory Machinery (net) Franchise (net) Total assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity 80,000 55,000 120,000 30,000 $ 325,000 $ 50,000 5,000 55,000 110,000 105,000 $325,000 Additional Information: 1. Cash Includes a $20,000 restricted amount to be used for repayment of the bonds payable in 2028. 2. The cost of the machinery is $190,000. 3. Accounts receivable Includes a $20.000 notes receivable from a customer due in 2027. 4. The notes payable balance Includes accrued interest of $5,000. Principal and Interest are both due on February 1, 2025. 5. The company began operations in 2019. Net income less dividends since inception of the company totals $35,000. 6. 50,000 shares of no par common stock were issued in 2019. 100,000 shares are authorized. Current assets Net accounts receivable Total current assets ° 0
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