Exercise 3-7 (Algo) Balance sheet preparation; errors [LO3-2, 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. Cash Accounts receivable: Inventory Machinery (net) Franchise (net) Total assets LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Liabilities and Shareholders' Equity Accounts payable Allowance for uncollectible accounts Notes payable Bonds payable Shareholders' equity Total liabilities and shareholders' equity Additional Information $ 50,000 95,000 60,000 125,000 35,000 $365,000 $ 60,000 10,000 65,000 115,000 115,000 $365,000 1. Cash includes a $25,000 restricted amount to be used for repayment of the bonds payable in 2028 2. The cost of the machinery is $200,000 3. Accounts receivable includes a $25,000 notes receivable from a customer due in 2027 4. The notes payable balance includes accrued interest of $10,000. 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 $40,000. 6.55,000 shares of no par common stock were issued in 2019. 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 Note: Amounts to be deducted should be indicated by a minus sign. LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Current assets Cash Accounts receivable Allowance for uncollectible accounts Net accounts receivable Inventory Total current assets Investments Restricted cash Property, plant, and equipment. Net property, plant, and equipment Intangible assets: Other assets: Total assets S 25,000 $ 70,000 (25,000) 45,000 60,000 130,000 0 $ 130,000 LOS GATOS CORPORATION Balance Sheet At December 31, 2024 Assets Current assets Cash Accounts receivable Allowance for uncollectible accounts Net accounts receivable Inventory Total current assets Investments Restricted cash Property, plant, and equipment. Net property, plant, and equipment Intangible assets: Other assets: Total assets S 25,000 $ 70,000 (25,000) 45,000 60,000 130,000 0 $ 130,000 Current liabilities: Total current liabilities Long-term liabilities: Total liabilities Shareholders' equity Liabilities and Shareholders' Equity 0 0 Total shareholders' equity 0 Total liabilities and shareholders' equity $ 0