Question:
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant.
In reviewing the statement you notice several errors.
Additional Information:
1. Cash includes a $20,000 bond sinking fund to be used for repayment of the bonds payable in 2017.
2. The cost of the machinery is $190,000.
3. Accounts receivable includes a $20,000 note receivable from a customer due in 2016.
4. The note payable includes accrued interest of $5,000. Principal and interest are both due on February 1,
2014.
5. The company began operations in 2008. Income less dividends since inception of the company totals
$35,000.
6. 50,000 shares of no par common stock were issued in 2008. 100,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet.
Answer:
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant.
In reviewing the statement you notice several errors.
Additional Information:
1. Cash includes a $20,000 bond sinking fund to be used for repayment of the bonds payable in 2017.
2. The cost of the machinery is $190,000.
3. Accounts receivable includes a $20,000 note receivable from a customer due in 2016.
4. The note payable includes accrued interest of $5,000. Principal and interest are both due on February 1,
2014.
5. The company began operations in 2008. Income less dividends since inception of the company totals
$35,000.
6. 50,000 shares of no par common stock were issued in 2008. 100,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet.
Answer:
