Clarmont Resources has the following account balances at October 31, 2014. The inventory balance was determined using

Question:

Clarmont Resources has the following account balances at October 31, 2014. The inventory balance was determined using FIFO.

Clarmont Resources has determined that the replacement cost (current market value) of the October 31, 2014, ending inventory is $38,000.
Requirements
1. What value would Clarmont Resources report on the balance sheet at October 31, 2014, for inventory assuming the company uses the lower of cost or net realizable value rule?
2. Prepare any adjusting journal entry required from the information given.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...