Analyzing an Inventory Footnote Disclosure General Electric Company reports the following footnote in its 10-K report, December 31 (in millions) 2012 2011 Raw materials and work in process $9,295 $8.735 Finished goods 6,020 4.971 Unbilled shipments 378 485 15,693 14.191 Less revaluation to UFO (398) (450) $ 15,295 $ 13,741 The company reports its inventories using the LIFO inventory costing method (a) What is the balance in inventories reported on GES 2012 balance sheet? million) 50 (b) What would GEs 2012 balance sheet have reported for inventories had the company used FIFO inventory costing? 0 (million) (cWhat cumulative effect has Ges choice of LIFO over fifo had on its pretax income as of year end 2012? The cumulative effect is that pretax income has decreased. LIFO matches more current"inventory costs against current selling prices, thus avoiding the recognition of holding gains The cumulative effect is that pretax income has not changed. LIFO and FIFO are simply two different ways to account for inventories. Both methods lead to the same pretax income The cumulative effect on pretax income is nonexistent. The LIFO and RFO methods of inventory accounting cause only cash flow effects, and they do not affect pretax income The cumulative effect is that pretax income has increased FIFO matches more current inventory costs against current selling prices, thus avoiding the recognition of holding gains (d) Assume GE has a 35% income tax rate. As of the 2012 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory? (Round your answer to the nearest whole number) $0 (million (e) What effect has the use of LIFO inventory costing had on GE's pretax income and tax expense for 2012 only (assume a 35% income tax rate)? (Round answers to the nearest whole number) 2012 pretax income by 0 million 2012 tax expense by so million Check Previous 5 Save Answers Next Courriel 2000 Gala Buchers Al Rights Reserved. Paletan Polis luser Gud.com.co