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26. Points = 10 1. 2. 3. 27. Points = 5 Date Account Description Debit Credit Debit Credit 28. Points = 5 1. 2. Date Account Description ACCT 221 Mid-Term Exam Spring 2016 1 29. Points = 10 Date Account Description ACCT 221 Mid-Term Exam Spring 2016 Debit Credit 2 30. Points = 10 1. Current ratio. ________________________ 2. Working capital. _________________________ 3. Acid-test ratio. _________________________ 4. Receivables turnover.__________________________ 5. Inventory turnover. ___________________________ 31. Points = 10 Prepare the net cash provided by operating activities section of the company's statement of cash flows for the current year, using the indirect method. ACCT 221 Mid-Term Exam Spring 2016 3 26. The December 31, 2014 stockholders' equity section of Cedar, Inc. is as follows: (10 Points) The market price of the common stock on December 31, 2014, was $10 per share. Answer the following independent questions: 1. What will the balance in the retained earnings account be immediately after the declaration of a 2-for-1 stock split? 2. If a cash dividend of $1 per share was declared to both common and preferred shareholders, what will the balance be in retained earnings immediately after the declaration? 3. What balance will be in the retained earnings account immediately after the declaration of a 20% common stock dividend on December 31, 2010? 27. A corporation had 50,000 shares of $2 par value common stock outstanding on March 1. On that date the board of directors approved a 10% stock dividend when the market value for the stock was $13 per share. What is the required journal entry to record this dividend? (5 Points) 28. The following stockholders' equity information is available for Danner Corporation regarding its common stock: (5 Points) Required: 1. What is the maximum number of new shares that Danner Corporation can issue? 2. Prepare the journal entry for the sale of 30,000 additional shares at the current selling price. 29. On January 1, 2014, Mars Corporation issued $900,000, 5%, 5-year bonds dated January 1, 2014, at 98. The bonds pay semiannual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a calendar year end. (10 points) INSTRUCTIONS: Prepare all the journal entries that Mars Corporation would make related to this bond issue through January 1, 2015. Be sure to indicate the date on which the entries would be made. 30. Dane Corporation had the following comparative current assets and current liabilities: (10 points) Dec. 31, 2014 -------------Current assets Cash Marketable securities Accounts receivable Inventory Prepaid expenses Total current assets Current liabilities Accounts payable Salaries payable Income tax payable Total current liabilities $ 60,000 50,000 70,000 100,000 30,000 ------------$310,000 $140,000 50,000 20,000 ------------$210,000 Dec. 31, 2013 ------------$ 40,000 10,000 100,000 90,000 20,000 -----------$260,000 $100,000 30,000 10,000 -----------$140,000 During 2014, credit sales and cost of goods sold were $800,000 and $400,000, respectively. INSTRUCTIONS Compute the following liquidity measures for 2014 (round to 2 decimal places) SHOW ALL CALCULATIONS: 1. Current ratio. 2. Working capital. 3. Acid-test ratio. 4. Receivables turnover. 5. Inventory turnover. 31. The following information related to comparative balance sheets is available for Metro Corporation: (10 points) Additional selected information from the income statement was also provided: 1. Depreciation expense of $20,000 2. A loss on sale of equipment $3,500 3. Net income $122,000 Prepare the cash flows from operating activities using the indirect method