Presented below is information related to Waterway Inc.’s inventory, assuming Waterway uses lower-of-LIFO cost-or-market. (per unit) Skis Boots Parkas Historical cost $262.20 $146.28 $73.14 Selling price 292.56 200.10 101.78 Cost to distribute 26.22 11.04 3.45 Current replacement cost 280.14 144.90 70.38 Normal profit margin 44.16 40.02 29.33 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. (Round answers to 2 decimal places, e. g. 52.75.)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

A. Skis

Ceiling $266.34

Floor $222.18

B.Cost Amount $146.28

C.The market amount $70.38

Explanation:

A. Computation of Waterway Inc two limits to market value that should be used in the lower-of-cost-or-market computation for skis

A.Skis

Ceiling

Selling price 292.56

less:cost to distribute -26.22

Ceiling 266.34

Floor

NRV 266.34

less:normal profit margin -44.16

Floor 222.18

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

Boots

Ceiling

Selling price 200.10

less:cost to distribute -11.04

Ceiling 189.06

Floor

NRV 189.06

less:normal profit margin -40.02

Floor 149.04

CostReplacementceilingFloorMVLCM

146.28144.90189.06149.04149.04146.28

Therefore the cost amount that should be used in the lower-of-cost-or-market comparison of boots will be 146.28

C.Calucation for the market amount that should be used to value parkas on the basis of the lower-of-cost-or-market.

Parkas

Ceiling

Selling price 101.78

less:cost to distribute -3.45

Ceiling 98.33

Floor

NRV 98.33

less:normal profit margin -29.33

Floor 69

CostReplacementceilingFloorMVLCM

73.14 70.3899.336970.3870.38

The market amount $70.38

it should be

answer; false pretense;