Analyzing an Inventory Footnote DisclosureThe inventory footnote 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 majorclassification at October 28, 2018, and October 29, 2017, in millions of dollars would have been as follows:S millions20182017Raw materials and supplies$2,233 $1,688Work-in-process7764954,777 3,1827,786 5,365Finished goods and partsTotal FIFO valueLess adjustment to LIFO value 1,637 1,461Inventories$6,149 $3,904This footnote reveals that not all of Deere's inventories are reported using the same inventory costing method (companies can use differentinventory costing methods for different inventory pools).a. What amount does Deere report for inventories on its 2018 balance sheets? S 6,149millionb. What would Deere have reported as inventories on its 2018 balance sheet had the company used FIFO inventory costing for all of itsinventories? S 7,786millionc. What cumulative effect has the use of LIFO inventory costing had, as of year-end 2018, on Deere's pretax income compared with the pretaxincome it would have reported had it used FIFO inventory costing for all of its inventories?Deere's cumulative pretax income has decreasedby $ 1,637million since it adopted LIFO inventory costing.d. Assuming an average (cumulative) income tax rate of 30%, by what cumulative dollars amount has Deere's tax expense been affected byuse of LIFO inventory costing as of year-end 2018? Has the use of LIFO inventory costing increased or decreased Deere's cumulative taxexpense?(Round answer to one decimal place.)v by s 491.1Deere's cumulative income taxes were lowermillion as compared to the taxes that would've been paid underthe 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 taxrate)?(Round answers to one decimal place, if applicable.)2018 pretax income decreased v by s 37x million.2018 tax expense decreasedv by $ 0x million.

The inventory footnote 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: $ millions 2018 2017 Raw materials and supplies $2,233 $1,688 Work-in-process 776 495 Finished goods and parts 4,777 3,182 7,786 5,365 Total FIFO value Less adjustment to LIFO value 1,637 1,461 $6,149 $3,904 Inventories This 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? $ 6,149 million b. What would Deere have reported as inventories on its 2018 balance sheet had the company used FIFO inventory costing for all of its inventories? $ 7,786 million c. 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? Deere's cumulative pretax income has decreased v by $ 1,637 million since it adopted LIFO inventory costing. 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 costing increased or decreased Deere's cumulative tax expense? (Round answer to one decimal place.) v by $ 491.1 Deere's cumulative income taxes were lower million 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 rate)? (Round answers to one decimal place, if applicable.) 2018 pretax income decreased v by $ 37 x million. 2018 tax expense decreased v by $ 0 x million.