Question

How do I journalize the exchange of Common Stock for a Building/Land? Who are the Primary users of Financial Analysis? How does the Contribution Margin Format Income Statement differ from the standard Income Statement? What is the First Budget prepared in the Master Budgeting Process?

Answer 1

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How do I journalize the exchange of Common Stock for a Building/Land?
The Journal entry will be :
Building /Land Dr.
Common Stock Cr.
Additional paid in capital- Common Stock Cr.	If the common stock is exchanged in premium.
Who are the Primary users of Financial Analysis?
The primary users are stockholders, investors, creditors, lenders and government.
How does the Contribution Margin Format Income Statement differ from the standard Income Statement?
The main difference is treatment of costs. Under Contribution Margin Format Income Statement cost are two types product cost and period costs. All type of fixed costs and costs related to selling and administrative function are treated as period costs
and not allocated over products. They are expensed out in full in the year incurred. Closing Inventory includes only variable production costs.
Under Standard Income Statement all type of cost related to production whether variable or fixed are apportioned to products and therefore carried forward in closing inventory costs.
What is the First Budget prepared in the Master Budgeting Process?
Sales Budget is the first Budget prepared in the Master Budgeting Process.