Question: Eagle Resources, which uses the FIFO method, has the following account balances at May 31, 2012, prior to releasing the financial statements for the year:

Eagle Resources, which uses the FIFO method, has the following account balances at

May 31, 2012, prior to releasing the financial statements for the year:

Eagle has determined that the replacement cost (current market value) of the May 31, 2012, ending inventory is $12,800.
Requirements
1. Prepare any adjusting journal entry required from the information given.
2. What value would Eagle report on the balance sheet at May 31, 2012, forinventory?

Cost of goods sold Sales revenue Inventory 12,500 Beg Bal End Bal 13,000 Bal 118,000 Bal 69,000

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