On December 31, 2013, the Merchandise Inventories account of the Japanese electronics firm Flower Limited (Flower) had a balance of ¥408,700 million, based on Flower's financial reports for fiscal 2013 . Assume that during 2014, Flower purchased merchandise inventories on account for ¥1,456,400 million. On December 31, 2014, it finds that merchandise inventory on hand is ¥412,400 million
Select the correct journal entries to account for all changes in the Inventories during 2014 . (Flower applies Japanese accounting standards, and reports its results in millions of yen (¥). In answering this question, assume that Flower uses either U.S. GAAP or IFRS; for purposes of this problem, this choice will not matter.)
a. Cost of Goods Sold ¥1,452,700 million
Merchandise Inventories ¥1,452,700 million
b. Merchandise Inventories ¥1,452,700 million
Cost of Goods Sold ¥1,452,700 million
c. Cost of Goods Sold ¥1,449,000 million
Merchandise Inventories ¥1,449,000 million
d. Merchandise Inventories ¥1,449,000 million
Cost of Goods Sold ¥1,449,000 million
e. none of the above
A
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