General Electric Company reports the following footnote in its 10-K report.

The company reports its inventories using the LIFO inventory costing method.

a. What is the balance in inventories reported on GE's 2012 balance sheet?

b. What would GE's 2012 balance sheet have reported for inventories had the company used FIFO inventory costing?

c. What cumulative effect has GE's choice of LIFO over FIFO had on its pretax income as of yearend 2012? Explain.

d. Assume GE has a \(35 \%\) income tax rate. As of the 2012 year-end, how much has GE saved in taxes by choosing LIFO over FIFO method for costing inventory? Has the use of LIFO increased or decreased GE's cumulative taxes paid?

e. What effect has the use of LIFO inventory costing had on GE's pretax income and tax expense for 2012 only (assume a 35\% income tax rate)?

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December 31 (In millions) Raw materials and work in process.. Finished goods.... Unbilled shipments.. Less revaluation to LIFO..... 2012 $ 9,295 6,020 378 15,693 2011 $ 8,735 14,191 (398) $15,295 $13,741 4,971 485 (450)