P7-10 (Algo) (Supplement A) Analyzing LIFO and FIFO When Inventory Quantities Decline Based on an Actual Note In a previous annual report, General Electric reported the following in its inventory note: December 31 (dollars in millions) Raw materials and work in progress Finished goods Unbilled shipments Current Year $ 5,613 2,853 247 8,713 (2,226) $ 6,487 Prior Year $ 5,425 2,476 288 8,189 (2,136) $ 6,053 Less revaluation to LIFO LIFO value of inventories It also reported a $22 million change in cost of goods sold due to "lower inventory levels." Required: 1. Compute the increase or decrease in the pretax operating profit (loss) that would have been reported for the current year had GE employed FIFO accounting for all inventory for both years. 2. Compute the increase or decrease in pretax operating profit that would have been reported had GE employed LIFO but not reduced inventory quantities during the current year. Required 1 Required 2 Compute the increase or decrease in the pretax operating profit (loss) that would have been reported for the current year had GE employed FIFO accounting for all inventory for both years. (Enter your answer in millions.) Pretax net income million Compute the increase or decrease in pretax operating profit that would have been reported had GE employed LIFO but not reduced inventory quantities during the current year. (Enter your answer in millions.) Net income before taxes million