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 value 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 58 percent and 60 percent of worldwide gross inventories at FIFO value on October 31, 2007 and 2006, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions o dollars would have been as follows 2007 2006 S 882 $712 Raw materials and supplies Work-in-process Finished machines and parts Total FIFO value 425 372 2,263 2,013 3,570 3,097 Less adjustment to LIFO value 1.233 1,140 Inventories S2,337 S1,957 Other Key information from Deere & Company 2007 2006 S 19,884.0 15,362.0 23,387.0 12,787.5 S 21,489.1 16,252.8 25,503.0 15,738.1 Sales COGS Current Assets Current Liabilities What adjustments to the financial statements (balance sheet and income statement) are necessary to convert from LIFO to FIFO for 2007: Assume 31% tax rate 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 value 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 58 percent and 60 percent of worldwide gross inventories at FIFO value on October 31, 2007 and 2006, respectively. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 31 in millions o dollars would have been as follows 2007 2006 S 882 $712 Raw materials and supplies Work-in-process Finished machines and parts Total FIFO value 425 372 2,263 2,013 3,570 3,097 Less adjustment to LIFO value 1.233 1,140 Inventories S2,337 S1,957 Other Key information from Deere & Company 2007 2006 S 19,884.0 15,362.0 23,387.0 12,787.5 S 21,489.1 16,252.8 25,503.0 15,738.1 Sales COGS Current Assets Current Liabilities What adjustments to the financial statements (balance sheet and income statement) are necessary to convert from LIFO to FIFO for 2007: Assume 31% tax rate