If FIFO method of inventory accounting had been used, inventory would have been approximately $ 62,951 and $71,186 higher than reported in 2006 and 2005 respectively. Assume a tax rate of 35%.

a) What will be the value of inventory for 2006 if ABC used FIFO valuation?

b) What will be the retained earnings for 2005 if ABC used FIFO valuation?

2005 S 195,360 2006 S 251,690 Finished goods Work-in-process and purchased parts Raw materials Inventories Retained carnings 245,123 136,568 S 570,430 $3,526,000 186,432 106,789 S 417,395 S3,159,000