The following information is taken from the annual report of The Claremont Corporation:

The company uses the LIFO method to value its inventory. In addition, the footnotes to the company’s annual report revealed that, during 2015 and 2014, inventory usage resulted in liquidations of LIFO inventory quantities, and the effect of these liquidations was to reduce the cost of goods sold by \($28\) million and \($6\) million in 2015 and 2014, respectively. Calculate the company’s net income before tax assuming that the LIFO inventory liquidations had not occurred. Discuss why the incremental profit from a LIFO-layer liquidation is often referred to as “phantom profit.”

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(in millions) 2015 2014 Net income before tax $360 $20