Journal entries for inventories and accounts payable. On December 31, 2006, the

Question

Journal entries for inventories and accounts payable. On December 31, 2006, the Merchandise Inventories account of the Japanese electronics firm Fujitsu Limited (Fujitsu) had a balance of 408,710 million, based on Fujitsu's financial reports for fiscal 2007. Assume that during 2007, Fujitsu purchased merchandise inventories on account for 1,456,412 million. On December 31, 2007, it finds that merchandise inventory on hand is 412,387 million. The Accounts Payable account had a balance of 757,006 million on December 31, 2006, and 824,825 million on December 31, 2007. Fujitsu applies Japanese accounting standards, and reports its results in millions of yen ( ). In answering this question, assume that Fujitsu uses either U.S. GAAP or IFRS; for purposes of this problem, this choice will not matter. Present journal entries to account for ail changes in the Inventories and Accounts Payable accounts during 2007. Fujitsu applies Japanese accounting standards, and reports its results in millions of yen ( ).

Explanation / Answer

31 Dec'06 Merch Inv Acct 408,710M Purchaed on Acct 1,456,412M 31 Dec 07 Ending Bal Merc Inv 412,387M So COGS : Op Bal of Merc Inv + Purch - Ending Bal of Merc Inv ie COGS = 408710 + 1456412 - 412387 = 1452735 31 Dec 06 Acct Pay 757,006M 31 Dec 07 Acct Pay 824,825M Cash Paid = Op Bal Acct Pay + Purc - Closing Bal Acct Pay = 757006+1456412-824825 = 1388593 Journal enntry mmddyy Merch Inv Dr 1,456,412M Acct Payable Cr 1,456,412M mmddyy COGS Dr 1452735 Merch Inv Cr 1452735 mmddyy Acct Payable Dr 1388593 Cash Cr 1388593

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.