The inventory footnote from Deere & Company's 2013 10-K follows ($ millions). 15. INVENTORIES A majority...

 

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The inventory footnote from Deere & Company's 2013 10-K follows ($ millions). 15. INVENTORIES A majority of inventory owned by Deere & Company and its US 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 net realizable value. The value of gross inventories on the LIFO basis at October 28, 2018 and October 29, 2017 represented 54 percent and 61 percent, respectively, of worldwide gross inventories at FIFO value. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 28, 2018 and October 29, 2017 in millions of dollars would have been as follows: 2018 2017 Raw materials and supplies. Work-in-process..... Finished goods and parts. Total FIFO value... Less adjustment to LIFO value... $2,233 $1,688 776 495 4,777 3,182 ... 7,786 (1,637) 5,365 (1,461) Inventories $6,149 $3,904 We note that not all of Deere's inventories are reported using the same inventory costing method (companies can use different inventory costing methods for different inventory pools). At what dollar amount are Deere's inventories reported on its 2018 balance sheet? At what dollar amount would inventories have been reported on Deere's 2018 balance sheet had it used FIFO inventory costing? What cumulative effect has the use of LIFO inventory costing had, as of year-end 2018, on its pretax income compared with the pretax income it would have reported had it used FIFO inventory costing? Explain. а. b. с. The inventory footnote from Deere & Company's 2013 10-K follows ($ millions). 15. INVENTORIES A majority of inventory owned by Deere & Company and its US 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 net realizable value. The value of gross inventories on the LIFO basis at October 28, 2018 and October 29, 2017 represented 54 percent and 61 percent, respectively, of worldwide gross inventories at FIFO value. If all inventories had been valued on a FIFO basis, estimated inventories by major classification at October 28, 2018 and October 29, 2017 in millions of dollars would have been as follows: 2018 2017 Raw materials and supplies. Work-in-process..... Finished goods and parts. Total FIFO value... Less adjustment to LIFO value... $2,233 $1,688 776 495 4,777 3,182 ... 7,786 (1,637) 5,365 (1,461) Inventories $6,149 $3,904 We note 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). At what dollar amount are Deere's inventories reported on its 2018 balance sheet? At what dollar amount would inventories have been reported on Deere's 2018 balance sheet had it used FIFO inventory costing? What cumulative effect has the use of LIFO inventory costing had, as of year-end 2018, on its pretax income compared with the pretax income it would have reported had it used FIFO inventory costing? Explain. а. b. с.

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Under the FIFO method the goodsinventory which is pur... View the full answer