Osprey Resources, which uses the FIFO inventory costing method, has the following account balances at May 31, 2026, prior to releasing the financial statements for the year:

Osprey Resources has determined that the current replacement cost (current market value) of the May 31, 2026, ending merchandise inventory is $12,800. 

Requirements 

1. Prepare any adjusting journal entry required from the information given. 

2. What value would Osprey Resources report on the balance sheet at May 31, 2026, for merchandise inventory?

Transcribed Image Text:

Merchandise Inventory, ending Cost of Goods Sold Net Sales Revenue $ 13,000 69,000 118,000