Eagle Resources, which uses the FIFO inventory costing method, has the following account balances at May 31, 2015, prior to releasing the financial statements for the year:
Merchandise Inventory, ending $ 13,000
Cost of Goods Sold 69,000
Sales Revenue 118,000
Eagle has determined that the current replacement cost (current market value) of the May 31, 2015, ending merchandise 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, 2015, for merchandise inventory.