Eaton Supply, Inc., has the following account balances at May 31, 2018. The inventory balance was determined

Question:

Eaton Supply, Inc., has the following account balances at May 31, 2018. The inventory balance was determined using FIFO.

Eaton Supply, Inc., has determined that the replacement cost (current market value) of the May 31, 2018, ending inventory is $35,900.

Requirements

1. What value would Eaton Supply, Inc., report on the balance sheet at May 31, 2018, for inventory, assuming the company uses the lower-of-cost-or-market rule??

2. Prepare any adjusting journal entry required based on the information given.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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