Analyzing Inventory Footnote Disclosure General Motors Corporation reported the following information in its 10-K report: Inventories at December 31 ($ millions) Productive material, work in process, and supplies Finished product, service parts, etc. Total inventories at FIFO Less LIFO allowance 2008 $5,185 2007 $6,603 9,762 10,431 14,947 17,034 (1,269) (1,459) Total automotive and other inventories, less allowances $13,678 |$15,575 | The company reports its inventory using the LIFO costing method during 2007 and 2008. a. At what dollar amount are inventories reported on its 2008 balance sheet? $ 0 million b. At what dollar amount would inventories have been reported in 2008 if FIFO inventory costing had been used? $ 0 million c. What cumulative effect has the use of LIFO had, as of year-end 2008, on GM's pretax income, compared to the pretax income that would have been reported using the FIFO costing method? Pretax income has million cumulatively since GM adopted LIFO inventory costing. by $ 0 d. Assuming a 35 % income tax rate, what is the cumulative effect on GM's tax liability as of year-end 2008 ? (Round answer to one decimal place.) Cumulative taxes have by $0 million by the use of LIFO costing.
Analyzing Inventory Footnote Disclosure General Motors Corporation reported the following information in its 10-K report: Inventories at December 31 ($ millions) Productive material, work in process, and supplies Finished product, service parts, etc. Total inventories at FIFO Less LIFO allowance 2008 $5,185 2007 $6,603 9,762 10,431 14,947 17,034 (1,269) (1,459) Total automotive and other inventories, less allowances $13,678 |$15,575 | The company reports its inventory using the LIFO costing method during 2007 and 2008. a. At what dollar amount are inventories reported on its 2008 balance sheet? $ 0 million b. At what dollar amount would inventories have been reported in 2008 if FIFO inventory costing had been used? $ 0 million c. What cumulative effect has the use of LIFO had, as of year-end 2008, on GM's pretax income, compared to the pretax income that would have been reported using the FIFO costing method? Pretax income has million cumulatively since GM adopted LIFO inventory costing. by $ 0 d. Assuming a 35 % income tax rate, what is the cumulative effect on GM's tax liability as of year-end 2008 ? (Round answer to one decimal place.) Cumulative taxes have by $0 million by the use of LIFO costing.
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Transcribed Image Text:Analyzing Inventory Footnote Disclosure
General Motors Corporation reported the following information in its 10-K report:
Inventories at December 31 ($ millions)
Productive material, work in process, and supplies
Finished product, service parts, etc.
Total inventories at FIFO
Less LIFO allowance
2008
$5,185
2007
$6,603
9,762 10,431
14,947 17,034
(1,269)
(1,459)
Total automotive and other inventories, less allowances $13,678 |$15,575 |
The company reports its inventory using the LIFO costing method during 2007 and 2008.
a. At what dollar amount are inventories reported on its 2008 balance sheet?
$ 0
million
b. At what dollar amount would inventories have been reported in 2008 if FIFO inventory costing had been used?
$ 0
million
c. What cumulative effect has the use of LIFO had, as of year-end 2008, on GM's pretax income, compared to the pretax income that would have been reported using the FIFO costing method?
Pretax income has
million cumulatively since GM adopted LIFO inventory costing.
by $ 0
d. Assuming a 35 % income tax rate, what is the cumulative effect on GM's tax liability as of year-end 2008 ?
(Round answer to one decimal place.)
Cumulative taxes have
by $0
million by the use of LIFO costing.
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