what value would eagle report on the balance sheet at may 31 2012 for inventory 559729

Applying the lower of cost or market rule to inventories

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:

Inventory

Cost of goods sold

Sales revenue

Beg Bal

12,500

End Bal

13,000

Bal 69,000

Bal 118,000

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, for inventory?

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