Brief Exercise 9-4 Presented below is information related to Sarasota Inc.\'s in

Question

Brief Exercise 9-4 Presented below is information related to Sarasota Inc.'s inventory, assuming Sarasota uses lower-of-LIFO cost-or-market. (per unit) Boots Parkas Historical cost Selling price Cost to distribute Current replacement cost Normal profit margin $285.00 318.00 28.50 304.50 48.00 $159.00 217.50 12.00 157.50 43.50 $79.50 110.63 3.75 76.50 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 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

(a) Ceiling = $289.50 ($318 - $28.50)

Floor = $241.50 ($318 - $28.50 - $48)

(b) $159

(c) $76.50

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