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

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

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 2RE: Black Corporation uses the LIFO cost flow assumption. Each unit of its inventory has a net...

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