Interpreting restructuring disclosures. The notes to the financial statements of Bayer Groups, a German pharmaceutical company, report

Question:

Interpreting restructuring disclosures. The notes to the financial statements of Bayer Groups, a German pharmaceutical company, report a balance of €154 million for Restructuring Provisions on December 31, 2007; for the prior year, the ending balance in this liability account was €196 million. During 2007, Bayer reports Utilizations (that is, expenditures) of €134 million, and Reversals of €31 million. Other effects (such as exchange rate differences and changes in the scope of consolidation) reduced the balance in this account by €5 million during 2007.

(a) What journal entry did Bayer make in 2007 to record Utilizations and Reversals?

(b) What journal entry did Bayer make in 2007 to record new additions to the restructuring provision account?

Financial Statements
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