Presented below is information related to Ivanhoe Inc.’s inventory, assuming Ivanhoe uses lower-of-LIFO cost-or-market.

(per unit)		Skis		Boots		Parkas
Historical cost		$285.00		$159.00		$79.50
Selling price		318.00		217.50		110.63
Cost to distribute		28.50		12.00		3.75
Current replacement cost		304.50		157.50		76.50
Normal profit margin		48.00		43.50		31.88

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.

Answer rating: 100% (QA)

a The two limits to market value ie the ceiling and ... View the full answer