Assume the Coca Cola Company reports the following footnote in its 10-K December 31 (In millions) Raw materials and work in process Finished goods Unbilled shipments Inventories LIFO RESERVE FIFO Inventory 2016 $5.527 5.152 333 11.012 (997) $12,009 2015 $5.042 4,806 402 10,250 (961) $11,211 The company reports its inventories using the LIFO inventory costing method. Assume Coca Cola (ticker KO) has a 35% income tax rate. For 2016, how much did KO save in taxes by choosing LIFO over FIFO method costing inventory? (round to the nearest million)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Assume the Coca Cola Company reports the following footnote in its 10-K
December 31 (In millions)
Raw materials and work in process
Finished goods
Unbilled shipments
Inventories
LIFO RESERVE
FIFO Inventory
2016
$ 5,527
5,152
333
11,012
(997)
$12,009
2015
$ 5,042
4,806
402
10,250
(961)
$11.211
The company reports its inventories using the LIFO inventory costing method.
Assume Coca Cola (ticker KO) has a 35% income tax rate. For 2016, how much did KO save in taxes by choosing LIFO over FIFO method for costing inventory? (round to the nearest million)
Transcribed Image Text:Assume the Coca Cola Company reports the following footnote in its 10-K December 31 (In millions) Raw materials and work in process Finished goods Unbilled shipments Inventories LIFO RESERVE FIFO Inventory 2016 $ 5,527 5,152 333 11,012 (997) $12,009 2015 $ 5,042 4,806 402 10,250 (961) $11.211 The company reports its inventories using the LIFO inventory costing method. Assume Coca Cola (ticker KO) has a 35% income tax rate. For 2016, how much did KO save in taxes by choosing LIFO over FIFO method for costing inventory? (round to the nearest million)
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