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Restating Inventory Values Using the LIFO Inventory Reserve. Chemical Boost, Inc. is a manufacturer of chemical and derivative products. Presented below is selected information from
Restating Inventory Values Using the LIFO Inventory Reserve. Chemical Boost, Inc. is a manufacturer of chemical and derivative products. Presented below is selected information from Chemical Boost's recent annual report. \begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{\begin{tabular}{l} Chemical Boost, Inc. \\ Condensed Balance Sheet \end{tabular}} \\ \hline Assets & & & Liabilities \& Shareholders' Equity & & \\ \hline Inventory & $16,250 & $15,500 & Liabilities & $63,175 & $61,300 \\ \hline Other current assets & 33,900 & 34,750 & Capital stock & 18,650 & 17,950 \\ \hline Noncurrent assets & 50,750 & 47,250 & Retained earnings & 19,075 & 18,250 \\ \hline Total & $100,900 & $97,500 & Total & $100,900 & $97,500 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{l} Chemical Boost, Inc. \\ Condensed Statement of Earnings \end{tabular}} \\ \hline (\$ millions) & Year 2 & Year 1 \\ \hline Revenues & $101,425 & $104,750 \\ \hline Cost of goods sold & 69,125 & 70,600 \\ \hline Gross proft & 32,300 & 34,150 \\ \hline Other expenses & 29,400 & 31,063 \\ \hline Income taxes & 750 & 1,550 \\ \hline Net earnings & $2,150 & $1,538 \\ \hline \end{tabular} Year 2 and Year 1. Assume an effective tax rate of 26%. 1. If Chemical Boost, Inc. had used FIFO instead of LIFO to value its inventory, what value would have been reported for Year 2 for the following accounts? Enter answers in millions. Round to the nearest million, if needed. a. Ending inventory \$ million b. Cost of goods sold $ million c. Net income before $ million d. Retained earnings $ million 2. How much additional income tax would the company have paid if it had used FIFO instead of LIFO to value its inventory? Round to the nearest millions. $ million
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