General Electric Company reports the following footnote in its \(10-\mathrm{K}\) report.

The company reports its inventories using the LIFO inventory costing method.

a. What is the balance in inventories reported on GE's 2007 balance sheet?

b. What would GE's 2007 balance sheet have reported for inventories had the company used FIFO inventory costing?

c What cumulative effect has GE's choice of LIFO over FIFO had on its pretax income as of year- end 2007? Explain.

d. Assume GE has a 35% income tax rate. As of the 2007 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory? Has the use of LIFO increased or decreased GE's cumulative taxes paid?

e. What effect has the use of LIFO inventory costing had on GE's pretax income and tax expense for 2007 only (assume a 35% income tax rate)?

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December 31 (in millions) 2007 Raw materials and work in process..... $ 7,893 2006 $ 5,870 Finished goods..... 5,025 4,263 Unbilled shipments... 539. 409 13,457 10,542 Less revaluation to LIFO..... (623) (564) $12,834 $ 9,978