Vermont Resources$,$ which uses the FIFO inventory costing$$ method, has the following account balances at August $31,2025,$ prior to releasing the financial statements for the$$ year:

Merchandise Inventory, ending

$$12,500$

Cost of Goods Sold

$69,000$

Net Sales Revenue

$121,000$

$.$

$.$

$.$

Question content area top right

Part $1$

Vermont has determined that the current replacement cost$($current market$$ value$)$ of the August $31,2025,$ ending merchandise inventory is $ $11$ comma $500.$

Read the requirementsLOADING....

Question content area bottom

Part $1$

Requirement $1.$ Prepare any adjusting journal entry required from the given information.$($Record debits$$ first, then credits. Select the explanation on the last line of the journal entry. For situations that do not require an$$ entry, make sure to select$"$No entry$$ required" in the first cell in the$$ "Accounts" column and leave all other cells$$ blank.$)$

Date

Accounts and Explanation

Debit

Credit

Aug. $31$

Part $2$

Requirement $2.$ What value would Vermont report on the balance sheet at August $31,2025,$ for merchandise$$ inventory?

According to the

$$

consistency

estimating$-$ending$-$inventory

FIFO

lower$-$of$-$cost$-$or$-$market

materiality

$$rule$,$ Vermont Resources should report inventory on the August $31$ balance sheet at

$$

$$10,000.$

$$11,500.$

$$12,500.$

$$69,000.$

$$121,000.$