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 uncollectible accounts 5,000
Note payable 55,000
Bonds payable 110,000
Shareholders’ equity 105,000
Total liabilities and shareholders’ equity $ 325,000
Additional information:.
1. Cash includes a $27,000 restricted amount to be used for repayment of the bonds payable in 2025.
2. The cost of the machinery is $204,000.
3. Accounts receivable includes a $27,000 notes receivable from a customer due in 2024.
4. The notes payable balance includes accrued interest of $12,000. 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 $42,000.
6. 57,000 shares of no par common stock were issued in 2016. 100,000 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Total assets $ 253,000

Total liabilities and shareholders’ equity $ 253,000

Explanation:

LOS GATOS CORPORATION

Balance Sheet

At December 31, 2016

Assets

Cash $ 40,000

Accounts receivable 80,000

Inventories 55,000

Less

Restricted Cash   - $ 27000

Notes Receivable - $ 27000

Total Current Assets  $ 121,000    

Machinery $ 204,000

Less Accumulated Depreciation -102,000

Machinery (net) 102,000

Franchise (net) 30,000

Total assets $ 253,000

Liabilities and Shareholders’ Equity

Accounts payable $ 50,000

Note payable 43,000

Interest Payable 12000

Total Current Liabilities 105,000

Bonds payable 110,000

Total Liabilities  215,000

Shareholders’ equity 105,000

Less

Retained Earning   - 42,000

Common Stock   -25,000

Total liabilities and shareholders’ equity $ 253,000

As it is given in the Additional information.

1. Cash of $27,000 restricted amount to be used for repayment of the bonds payable is deducted from current liabilities.

2. The accumulated Depreciation is shown.

3. Notes receivable is deducted from accounts receivable.

4. Notes payable balance and accrued interest of $12,000 are shown separately.

5. Net income less dividends since inception of the company totals $42,000 is deducted as retained earnings.

6. The common stock issued is also deducted  from liabilities.

d) social security number

let me know if i am correct or not, so i can edit the answer.