Question

The section showing cash flow from operations, using the indirect method, for Ushi Creamery reported an increase in inventories during the year of ¥255M. Accounts payable related to the purchase of inventories increased by ¥15M. The direct method would show cash payments for inventory, purchased and manufactured, totaling ¥2,100M. What is Ushi Creamery ‘s cost of goods sold?

Answer 1

Y1,860

Step-by-step explanation:

Cost of goods sold can be computed using the formula

opening stock + purchases - closing stock

= (opening stock - closing stock) + (cash purchases + credit purchases)

= -255m + (2,100m + 15m)

= Y1,860.