91影视

(a) Calculation of the ceiling (Net realizable value) is calculated as follows:

$$\begin{gathered} Ceiling(NetRealizableValue)=SellingPrice-CosttoDistribute \\ =\$212-\$19 \\ =\$193 \end{gathered}$$

Calculation of the floor (Net realizable value less normal profit margin) is calculated as follows:

$$\begin{gathered} Floor=Ceiling-NormalProfitMargin \\ =\$193-\$32 \\ =\$161 \end{gathered}$$

(b) The cost for the boots equals the historical cost of $106, which will be used in the lower-of-cost-or-market approach.

(c) Calculation of the ceiling (Net realizable value) is calculated as follows:

$$\begin{gathered} Ceilling(NetRealizablevalue)=SellingPrice-CosttoDistribute \\ =\$73.75-\$2.50 \\ =\$71.25 \end{gathered}$$

Calculation of the floor (Net realizable value less normal profit margin) is calculated as follows:

$$\begin{gathered} Floor=Ceilling-NormalProfitMargin \\ =\$71.25-\$21.25 \\ =\$50 \end{gathered}$$

The designated market value is the middle value of the current replacement cost, net realizable value less normal profit margin (floor), and net realizable value (ceiling). The middle value is $51, which will be considered a designated market value in the lower-of-cost-or-market approach.