An annual report for General Motors Corporation included the following note:

For the year. GM reported net income (after taxes) of $320.5 million. At year-end. the balance of the GM retained earnings account was $15,340 million.
Required: 1. Determine the amount of net income that GM would have reported for the year if it had used the FIFO method (assume a 30 percent tax rate). 2. Determine the amount of retained earnings that GM would have reported at year-end If it ah*. a\ s had used the FIFO method (assume a 30 percent tax rate). 3. Use of the LIFO method reduced the amount of taxes that GM had to pay for the j ear compared with the amount that would have been paid if it had used FIFO. Calculate the amount of this reduction

(assume a 30 percent tax rate).

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Inventories are stated generally at cost, which is not in excess of market. The cost of substan- tially all domestic inventories was determined by the last-in, first-out (LIFO) method. If the first-in, first-out (FIFO) method of inventory valuation had been used by the Corporation for U.S. inventories, it is estimated that they would be $2,077.1 million higher at the end of this year, compared with $1.784.5 million higher at the end of last year.