ACCT HW

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#1 & 2

Account Title Amount

Stock

Account Title Amount

Distributable

Account Title Amount

Date Accounts Debit Credit

Adjustment – Available for Sale

Account Title Amount

Stock Dividends

Account Title Amount

Account Title Amount Stock Investments
Account Title Amount Treasury Stock
Account Title Amount

Problem #1

Date

Accounts

Debit

Credit

Choose from the account titles below (not all accounts will be used)

01/14/09

Account Title

Amount

Bonds Payable

Cash

Cash Dividends

Cash Dividends Payable

01/29/09

Common

Stock Dividends

Discount on Bonds Payable

Dividend Revenue

07/01/09

Gain on Retirement of Bonds

Gain on Sale of

Stock Investments

Interest Expense

Interest Payable

Land

Loss on Retirement of Bonds

Problem #2

Loss on Sale of Stock Investments

Market

02/28/09

Market Adjustment – Trading

Organization Expense

Paid-in Capital from

Treasury Stock

06/30/09

Paid-in Capital in Excess of Par Value

Premium on Bonds Payable

Retained Earnings

08/31/09

Stock Investment Revenue

Unrealized Gain – Equity

Unrealized Gain – Income

Unrealized Loss – Equity

Unrealized Loss – Income

#3

Common

Date Accounts Debit Credit

Amount Amount

Account Title Amount Choose from the account titles below (not all accounts will be used)

Amount Amount

Account Title Amount Bonds Payable

Amount Amount Cash

Cash Dividends
Cash Dividends Payable
Discount on Bonds Payable
Dividend Revenue
Gain on Retirement of Bonds
Interest Expense
Interest Payable
Land
Loss on Retirement of Bonds
Loss on Sale of Stock Investments
Market Adjustment – Trading
Organization Expense
Paid-in Capital in Excess of Par Value
Premium on Bonds Payable
Retained Earnings
Stock Dividends
Stock Investment Revenue
Stock Investments
Treasury Stock
Unrealized Gain – Equity
Unrealized Gain – Income
Unrealized Loss – Equity
Unrealized Loss – Income

(a)	Year			Total	Preferred	(b)
2011	5,000		12/30/09
2012	15,000
2013	35,000
		Common Stock
		Common Stock Dividends Distributable
		Gain on Sale of Stock Investments
Market Adjustment – Available for Sale
		Paid-in Capital from Treasury Stock

#4 & 5

Date Accounts Debit Credit

06/30/09 Account Title Amount Choose from the account titles below (not all accounts will be used)

Account Title Amount Bonds Payable
Account Title Amount Cash
Cash Dividends

Account Title Amount Cash Dividends Payable

Account Title Amount Common Stock

Account Title Amount Common Stock Dividends Distributable
Discount on Bonds Payable

Account Title Amount Dividend Revenue

Account Title Amount Gain on Retirement of Bonds

Gain on Sale of Stock Investments
Interest Expense
Interest Payable
Land

Loss on Retirement of Bonds

Date Accounts Debit Credit Loss on Sale of Stock Investments

Account Title Amount Market Adjustment – Available for Sale

Account Title Amount Market Adjustment – Trading

Account Title Amount Organization Expense
Paid-in Capital from Treasury Stock
Paid-in Capital in Excess of Par Value

Premium on Bonds Payable

Date Accounts Debit Credit Retained Earnings

Account Title Amount Stock Dividends

Account Title Amount Stock Investment Revenue
Account Title Amount Stock Investments
Account Title Amount Treasury Stock

Unrealized Gain – Equity
Unrealized Gain – Income
Unrealized Loss – Equity
Unrealized Loss – Income

Problem #4
12/14/09
01/14/10
Problem #5 (a)
	12/31/08
Problem #5 (b)
06/29/09

#6 & 7

Date Accounts Debit Credit

06/30/09 Account Title Amount Choose from the account titles below (not all accounts will be used)
Account Title Amount Bonds Payable
Cash

Account Title Amount Cash Dividends

Account Title Amount Cash Dividends Payable

Common Stock

08/31/09 Account Title Amount Common Stock Dividends Distributable
Account Title Amount Discount on Bonds Payable
Account Title Amount Dividend Revenue

Gain on Retirement of Bonds

Account Title Amount Gain on Sale of Stock Investments

Account Title Amount Interest Expense
Account Title Amount Interest Payable

Land

Loss on Retirement of Bonds

Date Accounts Debit Credit

Market Loss on Sale of Stock Investments

12/30/09 Account Title Amount

Market Adjustment – Available for Sale

Account Title Amount

Market Adjustment – Trading

Organization Expense

Paid-in Capital from Treasury Stock

Paid-in Capital in Excess of Par Value

Date Accounts Debit Credit Premium on Bonds Payable
12/31/08 Account Title Amount Retained Earnings
Account Title Amount Stock Dividends

Stock Investment Revenue

Account Title Amount Stock Investments

Account Title Amount Treasury Stock
Unrealized Gain – Equity
12/30/09 Account Title Amount Unrealized Gain – Income
Account Title Amount Unrealized Loss – Equity

Unrealized Loss – Income

Problem #6 (a)
07/31/09
09/30/09
Problem #6 (b)	Calculation for #6 (b)
Shares	Cost
Carter
BOD
Williams
Problem #7	Totals
06/14/09

#8

Amount

Item Amount

Item Amount
Item Amount
Item Amount
Item Amount
Item Amount

Item Amount

Total

Item Amount
Item Amount
Item Amount

Total

Item Amount
Item Amount
Item Amount

Total

Item Total

Item Amount
Item Total

Momma Corporation

Statement of Cash Flows

For the Year Ended December 31, 2013

Cash Flows from (for) Operating Activities

Item

Subtotal

Net Cash from (for) Operating Activities

Cash Flows from (for) Investing Activities

Net Cash from (for) Investing Activities

Cash Flows from (for) Financing Activities

Net Cash from (for) Financing Activities

Noncash Investing and Financing Activities (if any)

#9

Amount

xx.xxx Amount

Amount

xx.xxx Amount

xx.xxx% Amount

Amount

xx.xxx Amount

xx.xxx% Amount

xx.xxx Amount

Ratio	Sample Formatting	Answers	Computations
a.	Current Ratio				xx.xxx
b.	Acid-test (quick ratio)
c.	Receivables Turnover
d.	Inventory Turnover
e.	Profit Margin			xx.xxx%
f.	Asset Turnover
g.	Return on Assets
h.	Return on Common Stockholders’ Equity
i.	Earnings per Share	$ x.xx
j.	Price-Earnings Ratio
k.	Payout Ratio
l.	Debt to Total Assets Ratio
m.	Times Interest Earned Ratio
Note:	I have already preformatted the cells in the Answers column for you, but you can use the sample formatting column as a guide in case you erase the formatting in the Answers column. Show your work in the Computations column. Write your response to the short-answer question anywhere on this spreadsheet.

ACCT

Midterm Problems

1. Albert Corporation is authorized to issue 1,500,000 shares of $4 par value common stock. During
2013, its first year of operation, the company has the following stock transactions.
Jan. 15 Issued 500,000 shares of stock at $11 per share.
Jan.
30
The company’s attorney accepted 3,500 shares of common stock as payment for legal

services rendered in helping the company incorporate. The legal services are estimated to
have a value of $28,000.

July 2 Issued 100,000 shares of stock for land. The land had an asking price of $2,000,000. The
stock is currently selling on a national exchange at $14 per share.

Instructions
Journalize the transactions for Albert Corporation.

2. Vero Corporation has the following stockholders’ equity accounts on January 1, 2013:

The company uses the cost method to account for treasury stock transactions. During 2013, the
following treasury stock transactions occurred:

March 1 Purchased 12,000 shares at $18 per share.
July 1 Sold 3,500 shares at $21 per share.
Sept 1 Sold 3,100 shares at $14 per share.

Instructions
Journalize the treasury stock transactions for 2013.

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder

Common Stock, $10 par value $1,500,000

Paid-in Capital in Excess of Par 200,000

Retained Earnings 500,000

Total Stockholders’ Equity $2,200,000

3. Domino Corporation was organized on January 1, 2011. During its first year, the corporation issued
20,000 shares of $5 par value preferred stock and 200,000 shares of $1 par value common stock. At
December 31, the company declared the following cash dividends:

Year Dividend

2011 5,000

2012 15,000

2013 35,000

Instructions
(a) Show the allocation of dividends to each class of stock, assuming the preferred stock dividend

is 8% and cumulative.

(b) Journalize the declaration of the cash dividend at December 31, 2013.

4. On January 1, 2013, Alsace Corporation had $3,000,000 of $5 par value common stock outstanding
that was issued at par and retained earnings of $2,000,000. The company issued 250,000 shares of
common stock at $14 per share on July 1. On December 15, the board of directors declared a 15%
stock dividend to stockholders of record on December 31, 2013, payable on January 15, 2014. The
market value of Alsace Corporation stock was $18 per share on December 15 and $20 per share on
December 31. Net income for 2013 was $550,000.

Instructions
Journalize the issuance of stock on July 1, the declaration of the stock dividend on December 15,
2013, and the issuance of the stock dividend on January 15, 2014.

5. Prepare the journal entries for the following two independent situations:

(a) On January 1, 2013, Hathaway Corporation issued $300,000, 11%, 10-year bonds for $291,780.
The bonds were sold to yield an effective-interest rate of 12%. Prepare the journal entry that
Hathaway Corporation would make on January 1.

(b) Monaghan, Inc. redeemed $500,000 of its bonds at 9

on June 30, 2013, and immediately
retired them. The carrying value of the bonds on the retirement date was $493,500. The bonds
pay semiannual interest and the interest payment due on June 30, 2013 has been made and
recorded. Prepare the journal entry to record the retirement of these bonds.

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder
2

6. On December 31, 2012, Rhadik, Inc. owned the following securities, held as a short-term investment
(trading securities). The securities are not held for influence or control of the investee.

On December 31, 2012, the total fair value of the securities was equal to its cost. In 2013, the
following transactions occurred:
July 1 Received $2.25 per share cash dividend on BOD Co. common stock.
Aug 1 Received $0.90 per share cash dividend on Carter Co. common stock.
Sept 1 Sold 1,500 shares of BOD Co. common stock for cash at $7.50 per share, less brokerage

fees of $500.
Oct 1 Sold 1,200 shares of Carter Co. common stock for cash at $28 per share, less brokerage

fees of $900.

At year end on December 31, 2013, the market values per share were:

Instructions
(a) Prepare the journal entries to record the 2013 stock transactions.
(b) On December 31, 2013, prepare any adjusting entry that might be necessary relative to the

portfolio.

7. Information pertaining to long-term investments in stock in 2013 by Tater Corporation follows:

Obtained significant influence over Tot Company by buying 30% of its 180,000 outstanding shares
of common stock at a total cost of $28 per share on January 1, 2013. On June 15, Tot Company
declared and paid a cash dividend of $1.80 per share. On December 31, Tot’s reported net income
was $520,000.

Instructions
Prepare journal entries for January 1, June 15, and December 31 for Tater Corporation.

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder

Stock
# of

Shares Cost

Carter Common Stock 3,200 76,800

BOD Common Stock 6,400 51,840

Williams Common Stock 2,700 34,290

162,930

Carter Common Stock $27.00

BOD Common Stock $5.00

Williams Common Stock $15.00

8. A comparative balance sheet and income statement for Momma, Inc. is presented below:

Additional information
• Bonds matured and were paid off at face value for cash.
• Plant assets costing $119,000 were purchased for cash during the year.
• Old plant assets having an original cost of $80,500 were sold for $2,100 cash.
• Hint: You can determine cash dividends paid using information about retained earnings and net

income.

Instructions
For the year ended 2013, prepare a statement of cash flows using the indirect method.

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder

Momma, Inc.
Comparative Balance Sheets

December 31

Momma, Inc.
Comparative Balance Sheets
December 31
Momma, Inc.
Comparative Balance Sheets
December 31

Assets

2013 2012

Cash 129,222 167,760

Accounts Receivable 129,920 146,200

Inventories 157,500 143,990

Prepaid Expenses 39,760 36,400

Investments 193,200 159,600

Plant Assets 378,000 339,500

Accumulated Depreciation (77,400) (72,800)

Total Assets 950,202 920,650

Liabilities & Equity

Accounts Payable 156,800 194,220

Accrued Expenses 23,100 23,800

Bonds Payable 175,000 210,000

Common Stock 320,000 245,000

Retained Earnings 275,302 247,630

Total Liabilities & Equity 950,202 920,650

Momma, Inc.
Income Statement

For the Year Ended December 31, 2013

Momma, Inc.
Income Statement
For the Year Ended December 31, 2013
Momma, Inc.
Income Statement
For the Year Ended December 31, 2013

Sales 459,427

Less:

Cost of Goods Sold 201,86

Operating Expenses 112,274

Depreciation Expense 73,500

Income Taxes 12,350

Interest Expense 7,766

Loss on Sale of Plant Assets 10,500 418,255

Net Income 41,172

9. The financial statements of Dobson Company appear below:

Additional information
• All sales were credit sales.
• Market value of common stock on December 31, 2013, was $28 per share.
• Hint: You can determine the weighted-average common shares and cash dividends paid using

information in the stockholders’ equity section of both balance sheets and net income.

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder
5

Dobson, Inc.
Income Statement

For the Year Ended December 31

Dobson, Inc.
Income Statement
For the Year Ended December 31
Dobson, Inc.
Income Statement
For the Year Ended December 31
2013 2012

Net Sales 615,000 580,000

Cost of Goods Sold 405,000 354,000

Gross Margin 210,000 226,000

Selling & Administrative Expenses 120,800 114,800

Income from Operations 89,200 111,200

Other Expense & Losses

Interest Expense 7,800 6,000

Income before Taxes 81,400 105,200

Income Tax Expense 18,000 14,000

Net Income 63,400 91,200

Dobson, Inc.
Balance Sheets
December 31

Dobson, Inc.
Balance Sheets
December 31
Dobson, Inc.
Balance Sheets
December 31

Assets 2013 2012

Current Assets

Cash 31,000 18,000

Short-term Investments 13,000 15,000

Accounts Receivable, net 98,000 74,000

Inventories 102,000 88,000

Total Current Assets 244,000 195,000

Plant Assets, net 421,400 393,000

Total Assets 665,400 588,000

Liabilities & Equity

Current Liabilities

Accounts Payable 112,000 110,000

Income Taxes Payable 23,000 28,000

Total Current Liabilities 135,000 138,000

Bonds Payable 114,000 92,000

Stockholders’ Equity

Common Stock ($5 par) 150,000 150,000

Retained Earnings 266,400 208,000

Total Stockholders’ Equity 416,400 358,000

Total Liabilities & Equity 665,400 588,000

Instructions
Compute the following ratios for Dobson Company for 2013 (round to 3 decimal places):
(a) Current Ratio
(b) Acid-test (quick ratio)
(c) Receivables Turnover
(d) Inventory Turnover
(e) Profit Margin
(f) Asset Turnover
(g) Return on Assets
(h)
Return on Common Stockholders’ Equity
(i) Earnings per Share
(j) Price-Earnings (P-E) Ratio
(k) Payout Ratio
(l) Debt to Total Assets Ratio
(m) Times Interest Earned Ratio

What additional information would you want in order to evaluate Dobson, Inc.?

Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho Assignment Folder
6

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