Question - Presented below is information related to Wildhorse Inc.'s inventory, assuming Wildhorse uses lower-of-LIFO cost-or-market.
| (per unit) |
Skis |
Boots |
Parkas |
| Historical cost |
$266.00 |
$148.40 |
$74.20 |
| Selling price |
296.80 |
203.00 |
103.25 |
| Cost to distribute |
26.60 |
11.20 |
3.50 |
| Current replacement cost |
284.20 |
147.00 |
71.40 |
| Normal profit margin |
44.80 |
40.60 |
29.75 |
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.
(c) The market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.