Presented
below is information related to Rembrandt Inc.’s inventory. Determine the
following:
(Per unit) Skis
Boots Parkas
Historical cost $190.00
$106.00 $53.00
Selling price 212.00 145.00 73.75
Cost to distribute 19.00
8.00 2.50
Current replacement
cost 203.00 105.00 51.00
Normal profit margin 32.00 29.00 21.25
(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; and
(c) The
market amount that should be used to value parkas on the basis of the lower-of
cost-or-market.
(a)
Ceiling $193.00 ($212 – $19) Floor $161.00 ($212 – $19 – $32)
(b)
$106.00
(c)
$51.00
