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Illinois Tool Works reports the following footnote in its 10-K report. The comoany reports its inventories using the LIFO inventory costing method. A. What is
Illinois Tool Works reports the following footnote in its 10-K report. The comoany reports its inventories using the LIFO inventory costing method.
December 31 (in millions) 2018 2017 Raw material $523 $465 Work-in-process 161 141 Finished goods 731 703 LIFO reserve (97) Total inventories $1,318 $1,220 (89) (e) What effect has the use of LIFO inventory costing had on iTW's pretax income and tax expense for 2018 only (assume a 21% income tax rate)? Round answers to one decimal place when applicable 2018 pretax income by so million 2018 tax expense by $ 0 million A. What is the balance in inventories reported on ITWs 2018 balance sheet.
B. what would ITWs 2018 balance sheet have reported for inventories had the company used FIFO inventory costing ?
D. Assume the company has 35% income tax rate for years prior to 2017 and a 21% rate theareafter. ITWs LIFO reserve was $86 million at Dec 31, 2016. As of the 2018 year-end , how much has the company saved in taxes by choosing the LIFO over FIFO method for cost inventory?
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