Question 10

Presented below is information related to Swifty Inc.'s inventory, assuming Swifty 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.

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 $ ?