Most inventories owned by Deere & Company and its US 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 $59$ of worldwide gross inventories at FIFO value on October $31,$ Year $2$ and Year $1,$ 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:

We note 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$.$ At what dollar amount are Deere's inventories reported on its Year $2$ balance sheet?

$ million

b$.$ At what dollar amount would inventories have been reported on Deere's Year $2$ balance sheet had it used FIFO inventory costing?

$ million

c$.$ What cumulative effect has the use of LIFO inventory costing had, as of year$-$end Year $2,$ on its pretax income compared with the

pretax income it would have reported had it used FIFO inventory costing?

$($Show an increase as a positive number and a decrease as a negative number.$)$

$ million

d$.$ Assuming a $35\%$ income tax rate, by what cumulative dollar amount has Deere's tax liability been affected by use of LIFO inventory

costing as of year$-$end of Year $2?$ Has the use of LIFO inventory costing increased or decreased its cumulative tax liability?

$($Show an increase as a positive number and a decrease as a negative number. Round your answer to one decimal place.$)$

$ million

e$.$ What effect has the use of LIFO inventory costing had on Deere's pretax income and tax liability for Year $2($assume a $35\%$ income tax

rate$)?$

$($Show an increase as a positive number and a decrease as a negative number. Round your answers to one decimal place.$)$

Pretax income: $ million