Presented below is information related to Sunland Inc.’s inventory,
assuming Sunland uses lower-of-LIFO cost-or-market.
(per unit) Skis Boots Parkas
Historical cost 250.8 139.92 69.96
Selling price 279.84 191.4 97.35
Cost to distribute 25.08 10.56 3.30
Current replacement cost 267.96 138.6 67.32
Normal profit margin 42.24 38.28 28.05
Determine the following:
(a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-of-cost-or-market computation for skis.
(b) The cost amount that should be used in the lower-of-cost-or-market comparison of boots.
The cost amount$
(c) The market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.
The market amount$
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