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

Problem 1 LIFO TO FIFO: 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 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 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 of dollars would have been as follows: 2007 2006 Raw materials and supplies $ 882 $ 712 Work-in-process 425 372 Finished machines and parts 2,263 2.013 Total FIFO value 3.570 3,097 Less adjustment to LIFO value 1.233 1.140 Inventories $2,337 $1.957 Other Key information from Deere & Company 2007 2006 Sales $21.489.1 $ 19,884 0 COGS 16.252.8 15,362.0 Current Assets 25,503 0 23.387.0 Current Liabilities 15,738.1 12,787.5 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