LaRoe Lawns’ inventory increased during the year by $5.9 million. Its accounts p

Question

LaRoe Lawns’ inventory increased during the year by $5.9 million. Its accounts payable increased by $4.8 million during the same period. a. What is the amount of cash LaRoe paid to suppliers of merchandise during the reporting period if its cost of goods sold was $56.0 million? (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) b. Prepare a summary entry that represents the net effect of merchandise purchases during the reporting period. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for an event, select "No journal entry required" in the first account field.)

Explanation / Answer

Total Purchases Due as Cost of Goods Sold incurred                   56.00 Increased Payable                     4.80 Increased Inventory                     5.90 Cash Paid = Cost of Goods Sold +Increase in Inventory- Increase in Accounts Payable = 56+5.9-4.8 Cash Paid to Suppliers is =                   57.1 Journal Entry : Merchandise                   61.90     To Accounts Payable                  61.90

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