Determine the cost amount that should be used

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Question - Presented below is information related to Sheridan Inc.'s inventory, assuming Sheridan uses lower-of-LIFO cost-or-market.
(per unit)

Skis Boots Parkas

Historical cost $235.60 $131.44 $65.72

Selling price 262.88 179.80 91.45

Cost to distribute 23.56 9.92 3.10

Current replacement cost 251.72 130.20 63.24

Normal profit margin 39.68 35.96 26.35

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.

Reference no: EM132156145

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