Below are 2 questions. I have figured out how to calculate the answers, but I don't understand what the differences are between the 2 questions. The first question (Deere and Co) seems to be asking about 2016 ONLY, not the total tax savings caused by LIFO from 2015-2016 which the correct answer indicates. The 2nd question (GE) is asking as of 2016 year end, which seems to be asking that you include the years prior to 2016, i.e. "As of 2016 year end meaning everything prior that is listed" in the answer, but the correct answer only considers 2016. Can an expert explain to me how I can tell what is actually being asked so I don't get these wrong an an exam? Maybe a trick on how to decipher whether the question is actually asking for the difference in savings between the 2 years or only the savings that year. Thanks so much.

QUESTION 1:

Assume the following inventory footnote was obtained from the Deere & Company's 2016 10-K follows ($ millions). Inventories Most inventories owned by Deere & Company and its United States 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 market. The value of gross inventories on the LIFO basis represented 61 percent of worldwide gross inventories at FIFO value on October 31, 2016 and 2015, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions of dollars would have been as follows:

	2016	2015
Raw materials and supplies	$716	$589
Work-in-process	425	408
Finished machine and parts	2,126	2,004
Total FIFO value	3,267	3,001
Less adjustment to LIFO value	1,132	1,002
Inventories	$2,135	$1,999

We notice 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). What effect has the use of LIFO inventory costing had on Deere's tax liability for 2016 only (assume a 35% income tax rate)?

Select one:

A. $130 million tax savings

B. $ 45.5 million tax savings

C. $396 million tax savings

D. $ 85 million tax savings

QUESTION 2:

Assume General Electric Company reports the following footnote in its 10-K report.

December 31 (In millions)	2016	2015
Raw materials and work in process	$5,527	$5,042
Finished goods	5,152	4,806
Unbilled shipments	333	402
	11,012	10,250
Less revaluation to LIFO	(697)	(661)
	$10,315	$9,589

The company reports its inventories using the LIFO inventory costing method. Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?

Select one:

A. $3,610 million

B. $ 244 million

C. $6,705 million

D. $ 475 million