Assume the following trial balance and additional information from Marcelo Company:

Unadjusted Trial Balance Adjustment

December 31, 2015 December 31, 2015
Debit Credit Debit Credit
Cash on Hand 25,000.00
Cash in Bank 45,000.00
Accounts Receivable 49,000.00
Notes Receivable 30,000.00
Prepaid Insurance 15,000.00 (2) 10,000.00
Machinery 150,000.00
Furniture and fixtures 25,000.00
Accounts Payable 26,000.00
Notes Payable 50,000.00
Capital 127,850.00
Service income 275,000.00
Other Income 15,000.00
Salaries expense 45,000.00
Supplies expense 600.00 (3) 200.00
Rent expense 55,000.00
Taxes and licenses expense 7,250.00 (8) 130.00
Utilities expense 46,750.00
Interest Expense 250.00 (7) 750.00
Total 493,850.00 493,850.00

Adjusting Entries:
Doubtful accounts expense (1) 4,900.00
Allowance for doubtful accounts (1) 4,900.00
Insurance expense (2) 10,000.00
Supplies (3) 200.00
Interest Receivable (4) 450.00
Interest Income (4) 450.00
Depreciation expense (5) 7,500.00
Accumulated depreciation-M (5) 7,500.00
Depreciation expense (6) 2,250.00
Accumulated depreciation-F&F (6) 2,250.00
Interest Payable (7) 750.00
Taxes Payable (8) 130.00
26,180.00 26,180.00
Net Income to Capital
Adjusted Trial Balance Income Statement Balance Sheet
December 31, 2015 December 31, 2015 December 31, 2015
Debit Credit Debit Credit Debit Credit
25,000.00 - 25,000.00
45,000.00 - 45,000.00
49,000.00 - 49,000.00
30,000.00 - 30,000.00
5,000.00 5,000.00
150,000.00 - 150,000.00
25,000.00 - 25,000.00
- 26,000.00 26,000.00
- 50,000.00 50,000.00
- 127,850.00 127,850.00
- 275,000.00 275,000.00
- 15,000.00 15,000.00
45,000.00 - 45,000.00 - - -
400.00 400.00 -
55,000.00 - 55,000.00 -
7,380.00 - 7,380.00 -
46,750.00 - 46,750.00 -
1,000.00 - 1,000.00 -

- -
- -
4,900.00 - 4,900.00 -
- 4,900.00 4,900.00
10,000.00 - 10,000.00 -
200.00 - 200.00
450.00 - 450.00
- 450.00 450.00
7,500.00 - 7,500.00 -
- 7,500.00 7,500.00
2,250.00 - 2,250.00 -
- 2,250.00 2,250.00
- 750.00 750.00
- 130.00 130.00
509,830.00 509,830.00 180,180.00 290,450.00 329,650.00 219,380.00
110,270.00 - 110,270.00
290,450.00 290,450.00 329,650.00 329,650.00
Assume the following trial balance and additional information from Marcelo Company:
Unadjusted Trial Balance Adjustment
December 31, 2015 December 31, 2015
Debit Credit Debit Credit
Cash on Hand 25,000.00
Cash in Bank 45,000.00
Accounts Receivable 49,000.00
Notes Receivable 30,000.00
Prepaid Insurance 15,000.00
Machinery 150,000.00
Furniture and fixtures 25,000.00
Accounts Payable 26,000.00
Notes Payable 50,000.00
Capital 127,850.00
Service income 275,000.00
Other Income 15,000.00
Salaries expense 45,000.00
Supplies expense 600.00
Rent expense 55,000.00
Taxes and licenses expense 7,250.00
Utilities expense 46,750.00
Interest Expense 250.00
Total 493,850.00 493,850.00

Adjusting Entries:

- -
Net Income to Capital
Adjusted Trial Balance Income Statement Balance Sheet
December 31, 2015 December 31, 2015 December 31, 2015
Debit Credit Debit Credit Debit Credit

- - - - - -
- - -
- - - -
ANSWER KEY: SECOND QUARTERLY EXAM
Unadjusted Trial Balance Adjustment Adjusted Trial Balance Income Statement Balance Sheet
December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash ### ### 6,660,000.00
Accounts Receivable 200,000.00 200,000.00 200,000.00
Office Supplies 15,000.00 15,000.00 15,000.00
Machinery 220,000.00 220,000.00 220,000.00
Equipment 200,000.00 200,000.00 200,000.00
Accounts Payable 60,000.00 - 60,000.00 60,000.00
Notes Payable 50,000.00 50,000.00 50,000.00
Loan Payable 5,000,000.00 5,000,000.00 5,000,000.00
Capital 1,915,000.00 1,915,000.00 1,915,000.00
Service Income 510,000.00 510,000.00 510,000.00
Advertising Expense 50,000.00 50,000.00 - 50,000.00
Salaries Expense 190,000.00 190,000.00 190,000.00
Total 7,535,000.00 7,535,000.00

Adjusting Entries:
Doubful Accounts (1) 4,000.00 4,000.00 - 4,000.00
Allowance for Doubtful accounts (1) 4,000.00 - 4,000.00 4,000.00
Depreciation Expense (2) 17,600.00 17,600.00 - 17,600.00
Accumulated Depreciation-Machineries (2) 17,600.00 - 17,600.00 17,600.00
Depreciation Expense (3) 20,000.00 20,000.00 - 20,000.00
Accumulated Depreciation-Equipment (3) 20,000.00 - 20,000.00 20,000.00
Interest Expense (4) 100,000.00 100,000.00 - 100,000.00
Interest Payable (4) 100,000.00 - 100,000.00 100,000.00
- -
Total 141,600.00 141,600.00 7,676,600.00 7,676,600.00 ### ### 7,295,000.00 7,166,600.00
Net Income to Capital ### - 128,400.00
510,000.00 510,000.00 7,295,000.00 7,295,000.00