An annual report for National Paper Company included the following note: The last-in, first-out inventory method is used to value most of National Paper's U.S. inventories... If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $303.0 million and $240.0 million at December 31, 2017, and 2016, respectively. For the year 2017, National Paper Company reported net income (after taxes) of $2,444.0 million. At December 31, 2017, the balance of National Paper Company's retained earnings account was $6,180 million.
An annual report for National Paper Company included the following note: The last-in, first-out inventory method is used to value most of National Paper's U.S. inventories... If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $303.0 million and $240.0 million at December 31, 2017, and 2016, respectively. For the year 2017, National Paper Company reported net income (after taxes) of $2,444.0 million. At December 31, 2017, the balance of National Paper Company's retained earnings account was $6,180 million.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 77.2C
Related questions
Question
43.
Subject :- Accounting
![Required information
[The following information applies to the questions displayed below.]
An annual report for National Paper Company included the following note:
The last-in, first-out inventory method is used to value most of National Paper's U.S. inventories... If the first-in, first-out
method had been used, it would have increased total inventory balances by approximately $303.0 million and $240.0
million at December 31, 2017, and 2016, respectively.
For the year 2017, National Paper Company reported net income (after taxes) of $2,444.0 million. At December 31, 2017,
the balance of National Paper Company's retained earnings account was $6,180 million.
3. Use of the LIFO method reduced the amount of taxes that National Paper had to pay in 2017 compared with the amount that would
have been paid if National Paper had used FIFO. Calculate the amount of this reduction (assume a 30 percent tax rate). (Enter your
answer in millions rounded to 1 decimal place.)
Reduction in taxes
million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7b6ce77-7d1f-42c7-90fc-6e082dc1db1b%2F53034395-6f2a-45d5-8096-70fc348f7535%2Fzgt4pxr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
An annual report for National Paper Company included the following note:
The last-in, first-out inventory method is used to value most of National Paper's U.S. inventories... If the first-in, first-out
method had been used, it would have increased total inventory balances by approximately $303.0 million and $240.0
million at December 31, 2017, and 2016, respectively.
For the year 2017, National Paper Company reported net income (after taxes) of $2,444.0 million. At December 31, 2017,
the balance of National Paper Company's retained earnings account was $6,180 million.
3. Use of the LIFO method reduced the amount of taxes that National Paper had to pay in 2017 compared with the amount that would
have been paid if National Paper had used FIFO. Calculate the amount of this reduction (assume a 30 percent tax rate). (Enter your
answer in millions rounded to 1 decimal place.)
Reduction in taxes
million
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning