ACC 307 2-2 Homework 3 - The following balance sheet for...

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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 CORPORATIONBalance SheetAt December 31, 2013AssetsCash$52,000 Accounts receivable86,000 Inventories67,000 Machinery (net)130,000 Franchise (net)42,000 Total assets$377,000 Liabilities andShareholders’EquityAccounts payable$62,000 Allowance foruncollectible accounts6,000 Note payable68,000 Bonds payable120,000 Shareholders’ equity121,000 Total liabilities and shareholders’ equity$377,000 Additional information:1. Cash includes a $32,000 bond sinking fund to be used for repayment of the bonds payable in 2017.2. The cost of the machinery is $260,000.3. Accounts receivable includes a $21,000 note receivable from a customer due in 2016.4. The note payable includes accrued interest of $6,000. 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

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