E6-28. Analyzing an Inventory Footnote Disclosure 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 subsid iaries 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, repre sented 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 classifica tion at October 28, 2018, and October 29, 2017, in millions of dollars would have been as follows:

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 201 8 balance sheet?

b. What would Deere have reported as inventories on its 201 8 balance sheet had the company used FIFO inventory costing for all of its inventories?

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? Explain.

d. Assuming an average (cumulative) income tax rate of 30%, by what cumulative dollar amount has Deere's tax expense been affected by use of LIFO inventory costing as of year-end 2018? H as the use of LIFO inventory costing increased or decreased Deere's cumulative tax expense?

e. What effect has the use of LIFO inventory costing had on Deere's pretax income and tax expense for 2018 only (assume a 2 1 % income tax rate)?