Assume General Electric Company reports the following footnote in its 10-K report. December 31 (In millions) 2016 2015 Raw materials and work in process $5,527 $5,042 Finished goods 5,152 4,806 Unbilled shipments 333 402 11,012 10,250 Less revaluation to LIFO (697) (661) $10,315 $9,589 The company reports its inventories using the LIFO inventory costing method.Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?
Assume General Electric Company reports the following footnote in its 10-K report. December 31 (In millions) 2016 2015 Raw materials and work in process $5,527 $5,042 Finished goods 5,152 4,806 Unbilled shipments 333 402 11,012 10,250 Less revaluation to LIFO (697) (661) $10,315 $9,589 The company reports its inventories using the LIFO inventory costing method.Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume General Electric Company reports the following footnote in its 10-K report.
| December 31 (In millions) | 2016 | 2015 |
|---|---|---|
| Raw materials and work in process | $5,527 | $5,042 |
| Finished goods | 5,152 | 4,806 |
| Unbilled shipments | 333 | 402 |
| 11,012 | 10,250 | |
| Less revaluation to LIFO | (697) | (661) |
| $10,315 | $9,589 |
The company reports its inventories using the LIFO inventory costing method.
Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?
Assume GE has a 35% income tax rate. As of the 2016 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory?
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