Question

I. Vail Ski, Inc. has developed the following data for its inventory. Determine the reported inventory value assuming the lower of cost or market and lower of cost or net realizable value rules are applied to individual products. Show your computations. If not, no credit.

	Skis				Boots						Apparel						Supplies
Selling price	$	180,000				$	150,000					$	120,000					$	60,000
Cost		128,000					133,000						90,000						48,000
Replacement cost		120,000					130,000						110,000						50,000
Sales commission		10	%				10	%					10	%					10	%
Normal profit		20	%				20	%					15	%					15	%

*Sales commission and normal profit are % of selling price.

1) Lower of cost or net realizable value (LCNRV)

Skis:

Boots:

Apparel:

Supplies:

2) Lower of cost or market (LCM)

Skis:

Boots:

Apparel:

Supplies:

Answer 1