1) A _______________________ is a contractual agreement between an employer and
its employees for the employer to provide benefits (payments) to employees after they
retire.
2) The assumption that requires that a business be accounted for separately from its
owners is the __________________ assumption.
3) A corporation had the following stock outstanding when the company’s board of
directors declared a $95,000 cash dividend during the current year:
Allocate the cash dividend between the preferred and common stockholders assuming
the preferred stock is cumulative and nonparticipating and dividends are one year in
arrears.
4) Discuss the reasons companies make investments.
5) Identify and discuss the key characteristics of partnerships. Also, identify other
organizations that possess the positive aspects of both partnerships and corporations.
6) Identify whether a debit or credit yields the indicated change for each of the
following accounts.
7) Thomas Company has total fixed costs of $360,000 and variable costs of $14 per
unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by
$10,000, sales will increase from 40,000 to 65,000 units. Should Thomas reduce its per
unit sales price and pay for the additional advertising? (Support your answer with
calculations.)