Analyzing an Inventory Footnote Disclosure Illinois Tool Works reports the following footnote in its 10-K report. The company reports its inventories using the LIFO inventory costing method. December 31 (in millions) 2018 2017 Raw material $523 $465 Work-in-process 161 141 Finished goods 731 703 LIFO reserve (97) (89) Total inventories $1,318 $1,220 (a) What is the balance in inventories reported on ITW's 2018 balance sheet? $Answer 0 (million) (b) What would ITW's 2018 balance sheet have reported for inventories had the company used FIFO inventory costing? $Answer 0 (million) (c) What cumulative effect has ITW's choice of LIFO over FIFO had on its pretax income as of year end 2018?

Analyzing an Inventory Footnote Disclosure Illinois Tool Works reports the following footnote in its 10-K report. The company reports its inventories using the LIFO inventory costing method. December 31 (in millions) 2018 2017 Raw material $523 $465 Work-in-process 161 141 Finished goods 731 703 LIFO reserve (97) (89) Total inventories $1,318 $1,220 (a) What is the balance in inventories reported on ITW's 2018 balance sheet? $Answer 0 (million) (b) What would ITW's 2018 balance sheet have reported for inventories had the company used FIFO inventory costing? $Answer 0 (million) (c) What cumulative effect has ITW's choice of LIFO over FIFO had on its pretax income as of year end 2018?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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