Inventories Most inventories owned by Deere & Company and its United States equipment subsidiaries are valued...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Inventories 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 61 percent of worldwide gross inventories at FIFO value on October 31, 2016 and 2015, 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: Raw materials and supplies Work-in-process Finished machine and parts Total FIFO value Less adjustment to LIFO value Inventories 2016 $716 425 2,126 3,267 1,132 $2,135 2015 $ 589 408 2,004 3,001 1,002 $1,999 We notice that not all of Deere's inventories are reported using the same inventory costing method (companies can use different inventory costing methods for different inventory pools). What effect has the use of LIFO inventory costing had on Deere's tax liability for 2016 only (assume a 35% income tax rate)? Inventories 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 61 percent of worldwide gross inventories at FIFO value on October 31, 2016 and 2015, 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: Raw materials and supplies Work-in-process Finished machine and parts Total FIFO value Less adjustment to LIFO value Inventories 2016 $716 425 2,126 3,267 1,132 $2,135 2015 $ 589 408 2,004 3,001 1,002 $1,999 We notice that not all of Deere's inventories are reported using the same inventory costing method (companies can use different inventory costing methods for different inventory pools). What effect has the use of LIFO inventory costing had on Deere's tax liability for 2016 only (assume a 35% income tax rate)?
Expert Answer:
Answer rating: 100% (QA)
Based on the information provided about Deeres inventories and costing methods we can analyze the ef... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these operating system questions
-
THIRD AVENUE SOFTWARE HEALTH-CARE APP PROJECT This case is new for the ninth edition of Information Technology Project Management . The case provides an opportunity to apply agile and Scrum...
-
China has a fixed exchange rate system. During COVID-19, many European countries output production had significantly decreased due to lockdown rules. Thus, China was facing a temporary increase in...
-
Use the following brief description of operations as the source for the next database design: All aircraft owned by ROBCOR require periodic maintenance. When maintenance is required, a maintenance...
-
The following are selected transactions of Bridgeport Department Store Ltd. for the current year ended December 31. Bridgeport is a private company operating in the province of Manitoba where PST is...
-
Leona holds 2013 nonrefundable tax credits of $65,000. None of these nonrefundable credits are personal credits that qualify for special treatment. Her regular income tax liability before credits is...
-
A cable TV company is considering offering optical fibre to residences to improve the speed of its movie download service. Before launching the new service, however, the company wants to find out...
-
How big a role does competitor analysis have in the hotel industry?
-
Comparing Cash Flow Streams youve just joined the investment banking firm of Dewey, Cheatum, and Howe. Theyve offered you two different salary arrangements. You can have $90,000 per year for the next...
-
A computer is programmed to shade in a sector of a pie chart 2.44 cm in radius; as shown in figure below. If the perimeter of the shaded sector is 7.32 cm, what is the central angle (in degrees) of...
-
Change Purse Inc. is a small business that is planned to be located in a small Nova Scotia town. The town was incorporated in 1889 and, like many communities in Nova Scotia, it prides itself on being...
-
Project CASE: As of January 1st, Landon Company owes First Bank $400,000 which is due on December 31st. Since Landon Company seems unable to repay the note, the bank agreed that Landon can settle...
-
2. What different kinds of surfaces can be produced by turning versus facing? 4. What is the basic difference between facing and cutoff operation? 8. Why is the spindle of the lathe hollow? 8. Why...
-
A brainstorming session is a fantastic way to get ideas down on paper. In this kind of creative thinking, no answer is wrong. It is just a possibility. Brainstorming with peers is a fun way to get...
-
B) what is her optimal choice and why? Close Window Moving to another question will save this response. Question 4 Question 4 of 5 20 points Save Answer An individual wants to have 1,000,000 AED in...
-
How do the race and ethnicity definitions in Strachan and Piper compare and contrast? Identify which of the multimedia sources you reviewed this week. How do the authors of the multimedia sources you...
-
1 Solve: 2-x=x+25
-
When was Jesus Born? Though most people celebrate the birth of Christ on December 25 th in the form of Christmas, most scholars agree that this is not the date he was born. In fact, as stated by Hi...
-
Difference between truncate & delete
-
Leslie is a single taxpayer who is under age 65 and in good health. For 2012, she has a salary of $23,000 and itemized deductions of $1,000. Leslie is entitled to one exemption on her tax return. a....
-
In 2012, Margaret and John Murphy are married taxpayers who file a joint tax return with AGl of $25,000. During the year they incurred the following expenses: Hospitalization insurance...
-
Charlie's Green Lawn Care is a cash basis taxpayer. Charlie Adame, the sole proprietor, is considering delaying some of his December 2012 customer billings for lawn care into the next year. In...
-
Why are the net present value and the internal rate of return models superior to the payback period and the accounting rate of return models?
-
State two basic differences between the net present value and the internal rate of return models that often lead to differences in the evaluation of competing investment proposals.
-
Using the equations and tables in Appendix 124A of this chapter, determine the answers to each of the following independent situations: a. The future value in two years of \($7,500\) invested today...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App