Clarmont Resources has the following account balances at October 31, 2010. The inventory balance was determined using FIFO.

Clarmont Resources has determined that the replacement cost (current market value) of the October 31,2010, ending inventory is $38,000.
Requirements 1. What value would Clarmont Resources report on the balance sheet at October 31, 2010, for inventory assuming the company uses the lower-of- cost-or-market rule?
2. Prepare any adjusting journal entry required from the information given.

Transcribed Image Text:

Inventory Cost of Goods Sold Sales Revenue Beg Bal 22,400 End Bal 35,500 Bal 114,000 Bal 188,000