the cost amount that should be used in the lower-of-cost-or-market comparison of boots

Presented below is information related to Rembrandt Inc.’s inventory.

(per unit)

Skis

Boots

Parkas

Historical cost

$190.00

$106.00

$53.00

Selling price

212.00

145.00

73.75

Cost to distribute

19.00

8.00

2.50

Current replacement cost

203.00

105.00

51.00

Normal profi t margin

32.00

29.00

21.25

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; and (c) the market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.

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