Balance sheet preparation; errors
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 uncollec-tible accounts
|
5,000
|
|
Note payable
|
55,000
|
|
Bonds payable
|
110,000
|
|
Shareholders' equity
|
105,000
|
|
Total liabilities and shareholders' equity
|
$325,030
|
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.