What journal entries explain the change in the total inventory accounts in 2009? You may assume that all labor and raw material purchases are paid in cash, all overhead is depreciation and there is no obsolescence. The inputs into work-in process are 60% raw materials, 25% overhead and 15% labor.

BALANCE SHEETS

At March 31, 2009

	2009	2008
Non-current assets
Property, plant and equipment	314	365
Construction in progress	47	51
Intangible assets	1853	1838
Available-for-sale securities	102	68
Other	205	172
	2521	2494
Current Assets
Inventories	450	472
Trade receivables, net	728	861
Other	746	1182
Cash and cash equivalents	1863	2191
	3787	4706
Total Assets	6308	7200
Share capital	1136	1180
Reserves	175	433
Total equity	1311	1613
Non-current liabilities	891	1098
Current liabilities
Trade payables	1991	2282
Provisions and accruals	1510	1945
Income Tax payable	89	87
Bank loans	20	61
Current portion of long-term debt	437	49
Other	59	65
	4106	4489
Total Liabilities	4997	5587
Total liabilities and equity	6308	7200

INCOME STATEMENT
For the year ended March 31, 2009
	2009
Sales	14901
Cost of sales	13160
Gross profit	1741
Selling, distribution and other expenses	-1103
Administrative expenses	-628
Research and development expense	-220
Operating loss	-210
Interest income	62
Interest expense	-40
Loss before taxes	-188
Taxation	-38
Loss for year	-226

CASH FLOW STATEMENT
For the year ended March 31, 2009
	2009
Cash flows from operating activities
Net income	-226
Depreciation and amortization	281
Gain/loss on sale of equipment and other assets	-1
Change in receivables	616
Change in inventories	26
Change in payables	-692
Other	-59
Net cash generated from operating activities	-55
Purchase of property, plant and equipment	-107
Proceeds from sales of property, plant and equipment	11
Construction of property, plant and equipment in process	-64
Purchases of intangible assets	-17
Proceeds from sales of securities available for sale	10
Net cash used in investing activities	-173
Exercise of share options	10
Repurchase of shares	-54
Dividends paid	-178
Increase in bank borrowings	122
Net cash used in financing activities	-100
Change in Cash	-328

footnotes: 2009 2008

Raw Materials 72 210

Work-in-process 109 57

Finished goods 269 205

Total 450 472

construction in progress 2009

beg year 51

add paid in cash 64

transfers to property-plANT EQUIP -68

END OF YEAR 47