TrueOil Company uses the LIFO method of accounting.

At the end of fiscal year 2016 they reported

Inventories (on Balance Sheet) 100 million

LIFO Reserve (in footnotes) 30 million

At the end of fiscal year 2017 they reported

Inventories (on Balance Sheet) 130 million

LIFO Reserve (in footnotes) 35 million

Show your work

a. If TrueOil Company was a FIFO firm, how much would they report as inventories on their Balance Sheet at the end of fiscal year 2017?

b. The 2017 COGS of TrueOil as reported in the Income Statement was $400 million. If TrueOil was a FIFO firm, how much would they report as COGS in 2017?

c. Assuming a 20% income tax rate, by what cumulative dollar amount (i.e. over the full life of the firm through 2017) have TrueOils cash payments to tax authorities been affected by the use of LIFO? Give direction: increased or decreased and the corresponding amount.