The inventory footnate from Deere & Company's 2018 10-K follows.Inventories A majority of Inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the "last-in, first-out" (LIFO) basis. Remaining Inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis at October 28, 2018,and October 29, 2017, represented 54 percent and 61 percent, respectively, of worldwide gross inventories at FIFO value. If all Inventories had been valued on a FIFO basis, estimated Inventories by major classification at October 28, 2018, and October 29, 2017, in millions of dollars would have been as follows:2018 2017$2,233 $1,6887764,777 3,1827,786 5,3651,637 1,461$ millionsRaw materials and suppliesWork-in-processFinished goods and partsTotalvelueLess adjustment to LIFO value 1,637Inventories495$6,149 $3,904This footnote reveals that not all of Deere's Inventories are reported using the same inventory costing method (companies can use different inventory costing methods for different inventory pools).a. What amount does Deere report for inventories on its 2018 balance sheets? $ 6,149b. What would Deere have reported as inventories on its 2018 balance sheet had the company used FIFO Inventory costing for all of its inventories? $ 7,786milionDeere's cumulative pretax income has decreased by $ 1,637c. What cumulative effect has the use of LIFO Inventory costing had, as of year-end 2018, on Deere's pretax income compared with the pretax income it would have reported had it used FIFO inventory costing for all of its inventories?milion since it adopted LIFO inventory costing.milion.d. Assuming an average (cumulative) Income tax rate of 30%, by what cumulative dollars amount has Deere's tax expense been affected by use of LIFO Inventory costing as of year-end 2018? Has the use of LIFO inventory casting increased or decreased Deere's cumulative tax expense?(Round answer to one decimal place.)Deere's cumulative Income taxes were lower by $ 499.1milionmillion as compared to the taxes that would've been paid under the FIFO system.e. What effect has the use of LIFO inventory costing had on Deere's pretax income and tax expense for 2018 only (assume a 21% Income tax ratej?(Round answers to one decimal place, if applicable.)2018 pretax income increased by 1762018 tax expense increased by $ 37 milion.

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The inventory footnate from Deere & Company's 2018 10-K follows. Inventories A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the "lastin, first-out" (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis at October 28, 2018, and October 29, 2017, represented 54 percent and 61 percent, respectively, of worldwide gross inventories at FIFO value. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 28, 2018, and October 29, 2017, in millions of dollars would have been as follows: 5 millions Fished goods and parts Total value Less adjustment to UFO value 2018 2017 $2,233 $1,688 776 495 4,777 3,182 1,637 1,461 $6,149 $3,004

The inventory footnate from Deere & Company's 2018 10-K follows. Inventories A majority of inventory owned by Deere & Company and its U.S. equipment subsidiaries are valued at cost, on the "lastin, first-out" (LIFO) basis. Remaining inventories are generally valued at the lower of cost, on the "first-in, first-out" (FIFO) basis, or net realizable value. The value of gross inventories on the LIFO basis at October 28, 2018, and October 29, 2017, represented 54 percent and 61 percent, respectively, of worldwide gross inventories at FIFO value. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 28, 2018, and October 29, 2017, in millions of dollars would have been as follows: 5 millions Fished goods and parts Total value Less adjustment to UFO value 2018 2017 $2,233 $1,688 776 495 4,777 3,182 1,637 1,461 $6,149 $3,004

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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