Exercise 3-7 (Algo) Balance sheet preparation; errors (L03-2, 3-3) The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant. In reviewing the statement you notice several errors. 78.000 0247.34 LOS GATOS CORPORATION Balance Sheet At December 31, 2021 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 137.000 74.000 139.000 49.000 $ 477,000 eBook 88.000 24,000 93,000 129,000 143,000 $ 477,000 References Additional Information: 1. Cash includes a $39,000 restricted amount to be used for repayment of the bonds payable in 2025, 2. The cost of the machinery is $228,000. 3. Accounts receivable includes a $39,000 notes receivable from a customer due in 2024 4. The notes payable balance includes accrued interest of $24,000. Principal and interest are both due on February 1, 2022 5. The company began operations in 2016. Net Income less dividends since inception of the company totals $54,000. 6. 69,000 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.) $ 39.000 LOS GATOS CORPORATION Balance Sheet At December 31, 2021 Assets Current assets: Cash Accounts receivable Allowance for uncollectible accounts Not accounts recevable Inventory Total current assets Investments Restricted cash Notes receivable 137.000) (74000) 63.000 74.000 176.000 39.000 39,000 39,000 Accounts recavab 137.000 Allowance for uncollect (74,000) Net accounts receivab 63,000 Inventory 74.000 Total current asse 39.000 Restricted cash Notes receivable 30 14 78,000 ences Total investments Property, plant, and equipment: Machinery Accumulated depreciation Net property, plant, and equipment Intangible assets: Franchise (net) 228,000 (89.000) 139,000 49,000 Total assets 442,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable 88.000 Interest payable 24.000 Notes payable 69,000 181,000 Total current abilities Long-term liabilities: Bonds payable 129.000 Totalbes 310,000 Shareholders equity 89.000 Rota ned oamings 54,000 Tota sharongidors ogurty tes and shareholders couly 450.000