Acc/422 Intermediate Accounting II Week 5

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Brief Exercise 9-4 Presented below is information related to Pharoah Inc.'s inventory, assuming Pharoah uses lower-ofLIFO cost-or-market. (per unit) Historical cost Selling price Cost to distribute Current replacement cost Normal profit margin Skis $197.60 220.48 19.76 211.12 33.28 Boots $110.24 150.80 8.32 109.20 30.16 Parkas $55.12 76.70 2.60 53.04 22.10 Determine the following: (a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the lower-ofcost-or-market computation for skis. $ Ceiling Limit $ Floor Limit (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 Don't show me this message again for the assignment