ACCT 221 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 1 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 .

1. ACCT 221
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:

2. 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
1
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

3. 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.

4. (b) Monaghan, Inc. redeemed $500,000 of its bonds at 96 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

5. 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
3
Stock
# of

6. 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.

7. Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho
Assignment Folder
4
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)

8. 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 201,865

9. 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

10. 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

11. 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

12. 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.?

13. Due Date: Sunday, April 7 @ 11 p.m. ET submit via WebTycho
Assignment Folder
6
#1 & 2Problem #1DateAccountsDebitCreditChoose from the
account titles below (not all accounts will be
used)01/14/09Account TitleAmountBonds PayableAccount
TitleAmountCashAccount TitleAmountCash DividendsCash
Dividends Payable01/29/09Account TitleAmountCommon
StockAccount TitleAmountCommon Stock Dividends
DistributableAccount TitleAmountDiscount on Bonds
PayableDividend Revenue07/01/09Account TitleAmountGain on
Retirement of BondsAccount TitleAmountGain on Sale of Stock
InvestmentsAccount TitleAmountInterest ExpenseInterest
PayableLandLoss on Retirement of BondsProblem #2Loss on
Sale of Stock InvestmentsDateAccountsDebitCreditMarket
Adjustment - Available for Sale02/28/09Account
TitleAmountMarket Adjustment - TradingAccount
TitleAmountOrganization ExpensePaid-in Capital from Treasury
Stock06/30/09Account TitleAmountPaid-in Capital in Excess of
Par ValueAccount TitleAmountPremium on Bonds
PayableAccount TitleAmountRetained EarningsStock
Dividends08/31/09Account TitleAmountStock Investment
RevenueAccount TitleAmountStock InvestmentsAccount
TitleAmountTreasury StockAccount TitleAmountUnrealized
Gain - EquityUnrealized Gain - IncomeUnrealized Loss -
EquityUnrealized Loss - Income
&A
#3(a)YearTotalPreferredCommon(b)DateAccountsDebitCredit20
115,000AmountAmount12/30/09Account TitleAmountChoose
from the account titles below (not all accounts will be
used)201215,000AmountAmountAccount TitleAmountBonds

14. Payable201335,000AmountAmountCashCash DividendsCash
Dividends PayableCommon StockCommon Stock Dividends
DistributableDiscount on Bonds PayableDividend RevenueGain
on Retirement of BondsGain on Sale of Stock
InvestmentsInterest ExpenseInterest PayableLandLoss on
Retirement of BondsLoss on Sale of Stock InvestmentsMarket
Adjustment - Available for SaleMarket Adjustment -
TradingOrganization ExpensePaid-in Capital from Treasury
StockPaid-in Capital in Excess of Par ValuePremium on Bonds
PayableRetained EarningsStock DividendsStock Investment
RevenueStock InvestmentsTreasury StockUnrealized Gain -
EquityUnrealized Gain - IncomeUnrealized Loss -
EquityUnrealized Loss - Income
&A
#4 & 5Problem #4DateAccountsDebitCredit06/30/09Account
TitleAmountChoose from the account titles below (not all
accounts will be used)Account TitleAmountBonds
PayableAccount TitleAmountCashCash
Dividends12/14/09Account TitleAmountCash Dividends
PayableAccount TitleAmountCommon StockAccount
TitleAmountCommon Stock Dividends DistributableDiscount on
Bonds Payable01/14/10Account TitleAmountDividend
RevenueAccount TitleAmountGain on Retirement of BondsGain
on Sale of Stock InvestmentsInterest ExpenseInterest
PayableLandProblem #5 (a)Loss on Retirement of
BondsDateAccountsDebitCreditLoss on Sale of Stock
Investments12/31/08Account TitleAmountMarket Adjustment -
Available for SaleAccount TitleAmountMarket Adjustment -
TradingAccount TitleAmountOrganization ExpensePaid-in
Capital from Treasury StockPaid-in Capital in Excess of Par
ValueProblem #5 (b)Premium on Bonds
PayableDateAccountsDebitCreditRetained
Earnings06/29/09Account TitleAmountStock DividendsAccount
TitleAmountStock Investment RevenueAccount
TitleAmountStock InvestmentsAccount TitleAmountTreasury
StockUnrealized Gain - EquityUnrealized Gain -

15. IncomeUnrealized Loss - EquityUnrealized Loss - Income
&A
#6 & 7Problem #6 (a)DateAccountsDebitCredit06/30/09Account
TitleAmountChoose from the account titles below (not all
accounts will be used)Account TitleAmountBonds
PayableCash07/31/09Account TitleAmountCash
DividendsAccount TitleAmountCash Dividends
PayableCommon Stock08/31/09Account TitleAmountCommon
Stock Dividends DistributableAccount TitleAmountDiscount on
Bonds PayableAccount TitleAmountDividend RevenueGain on
Retirement of Bonds09/30/09Account TitleAmountGain on Sale
of Stock InvestmentsAccount TitleAmountInterest
ExpenseAccount TitleAmountInterest PayableLandProblem #6
(b)Calculation for #6 (b)Loss on Retirement of
BondsDateAccountsDebitCreditSharesCostMarketLoss on Sale
of Stock Investments12/30/09Account
TitleAmountCarterMarket Adjustment - Available for
SaleAccount TitleAmountBODMarket Adjustment -
TradingWilliamsOrganization ExpensePaid-in Capital from
Treasury StockProblem #7TotalsPaid-in Capital in Excess of
Par ValueDateAccountsDebitCreditPremium on Bonds
Payable12/31/08Account TitleAmountRetained
EarningsAccount TitleAmountStock DividendsStock Investment
Revenue06/14/09Account TitleAmountStock
InvestmentsAccount TitleAmountTreasury StockUnrealized
Gain - Equity12/30/09Account TitleAmountUnrealized Gain -
IncomeAccount TitleAmountUnrealized Loss -
EquityUnrealized Loss - Income
&A
#8Momma CorporationStatement of Cash FlowsFor the Year
Ended December 31, 2013Cash Flows from (for) Operating
ActivitiesItemAmountItemAmountItemAmountItemAmountItem
AmountItemAmountItemAmountItemAmountSubtotalNet Cash
from (for) Operating ActivitiesTotalCash Flows from (for)
Investing ActivitiesItemAmountItemAmountItemAmountNet
Cash from (for) Investing ActivitiesTotalCash Flows from (for)

16. Financing ActivitiesItemAmountItemAmountItemAmountNet
Cash from (for) Financing
ActivitiesTotalItemTotalItemAmountItemTotalNoncash
Investing and Financing Activities (if any)
&A
#9RatioSample FormattingAnswersComputationsa.Current
Ratioxx.xxxAmountb.Acid-test (quick
ratio)xx.xxxAmountc.Receivables
Turnoverxx.xxxAmountd.Inventory
Turnoverxx.xxxAmounte.Profit Marginxx.xxx%Amountf.Asset
Turnoverxx.xxxAmountg.Return on
Assetsxx.xxx%Amounth.Return on Common Stockholders'
Equityxx.xxx%Amounti.Earnings per Share$
x.xxAmountj.Price-Earnings Ratioxx.xxxAmountk.Payout
Ratioxx.xxx%Amountl.Debt to Total Assets
Ratioxx.xxx%Amountm.Times Interest Earned
Ratioxx.xxxAmountNote: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.
&A