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BE9-1 BE9-2

Price: $3.99

BE9-1 Presented below is information related to Rembrandt Inc.’s inventory.
(per unit) Skis Boots Parkas



  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.

BE9-2 Floyd Corporation has the following four items in its ending inventory.


Item Cost Replacement Cost NRV NRV less NPM
Jokers  $2,000 $2,050 $2,100 $1,600
Penguins  5,000 5,100 4,950 4,100
Riddlers  4,400 4,550 4,625 3,700
Scarecrows  3,200 2,990 3,830 3,070

Determine the final lower-of-cost-or-market inventory value for each item.

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