Rocky bayou golf clubs, which uses the fifo method, has the following account balances at January 31, 2012, prior to releasing the financial statements for the year: inventory balance: $14,000 costs of goods sold balance : $70,000 sales revenue balance : $121,000 rocky bayou has determined that the replacement cost (current market value) of the January 31, 2012, ending inventory is $12,500.

Requirements:

1. Prepare any adjusting journal entry required from the information given.

2. What value would rocky bayou report on the balance sheet at January 31, 2012, for inventory?

Answer rating: 100% (QA)

1 Adjusting Entry Reduction in Value 1... View the full answer