Callowater Golf Clubs, which uses the FIFO method, has the following account balances at May 31, 2012, prior to releasing the financial statements for the year:

Callowater has determined that the replacement cost (current market value) of the May 31, 2012, ending inventory is $12,000.
Requirements
1. Prepare any adjusting journal entry required from the information given.
2. What value would Callowater report on the balance sheet at May 31, 2012 for inventory?

Transcribed Image Text:

Inventory Cost of goods sold Sales revenue Bal 14,000 Bal 67,000 Bal 120,000