3. Total inventory. b. Which of the LCNRV procedures from requirement a results in the lowest net income for the year? Explain. E7-32. Analyzing Inventory Note Disclosure General Motors Corporation reported the following information in its 10-K report: Inventories at December 31 ($ millions) 2008 2007 Productive material, work in process, and supplies $ 4,849 $ 6,267 Finished product, service parts, etc.. 9,426 10,095 Total inventories at FIFO...... 14,275 16,362 Less LIFO allowance .. (1,233) (1,423) Total automotive and other inventories, less allowances $13,042 $14,939 ers Cambridge Business Publishers e. C. b. Chapter 7 Reporting and Analyzing I The company reports its inventory using the LIFO costing method during 2007 and 2008. At what dollar amount are inventories reported on its 2008 balance sheet? At what dollar amount would inventories have been reported in 2008 if FIFO inventory costing had been used? 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? d. Assuming a 35% income tax rate, what is the cumulative effect on GM's tax liability as of year-end 2008? In July 2009, GM changed its inventory accounting to FIFO costs. Why do you suppose GM made that choice?