eBook Exercise 3-13 Journal Entries for Inventories and Accounts Payable On Dece

Question

eBook Exercise 3-13 Journal Entries for Inventories and Accounts Payable On December 31, Year 6, the Merchandise Inventories account of a Japanese electronics firm had a balance of 408,710 million, based on the firm's financial reports for fiscal Year 7. Assume that during Year 7, the firm purchased merchandise inventores on account for ¥1,456 412 million. On December 3, Year 7 it finds that merchandise inventory on han s HI, 8, million. he Accounts a able account had a balance of *757,006 million on December 31, Year 6, and x824,825 million on December 31, Year 7. Hide Present journal entries to account for all changes in the Inventories and Accounts Payable accounts during Year 7. The firm reports its results in millions of yen (). In answering this question, assume that the firm uses either U.S. GAAP or IFRS; for purposes of this problem, this choice will not matter. Purchase Record COGs Pay vendors

Explanation / Answer

JE for Purchases Merchandise Inventory DR 1456412 Accounts Payable CR 1456412 JE for Transfer to COGS Opening Balance 408710 Add Purchases 1456412 Less Closing Balance 412387 Transfer to COGS 1452735 Cost of Goods Sold DR 1452735 Merchandise Inventory CR 1452735 JE for Pay Vendors Opening Balance 757006 Add Purchases 1456412 Less Closing Balance 824825 Payment to Vendors 1388593 Accounts Payable DR 1388593 Cash CR 1388593

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