Problems $10-13$ Interpreting a LIFO note $($LO$10-5,$ LO$10-6,$ LO$10-7)$

Bourne Company $($a fictional company$)$ has the following inventory note in its $20$X$3$ annual report.

LIFO revaluations decreased $\backslash (\backslash$$ $140\backslash )$ million in $20$X$3,$ compared with decreases of $\backslash (\backslash$$ $169\backslash )$ million in $20$X$2$ and $\backslash$$$82$ million in $20$X$1.$ Included in these changes were decreases of $\backslash (\backslash$$ $30\backslash )$ million, $\backslash (\backslash$$ $12\backslash )$ million, and $\backslash (\backslash$$ $3\backslash )$ million in $20$X$3,20$X$2,$ and $20$X$1,$ respectively, that resulted from lower LIFO inventory levels. There were net cost decreases in each of the last three years.

Bourne's earnings before income taxes were $\backslash (\backslash$$ $20\mathrm{.}0\backslash )$ billion in $20$X$3.$ Assume a $\backslash (21\backslash \%\backslash )$ marginal tax rate.

Required:

$1.$ What are the total cumulative tax savings as of December $\backslash (31,20\backslash$times $3\backslash ),$ that Bourne has realized as a result of using the LIFO inventory method?

$2.$ What would Bourne's pre$-$tax earnings have been in $\backslash (20\backslash$times $3\backslash )$ if it had been using FIFO?

$3.$ What December $31,20$X$3,$ balance sheet amounts would be different$-$and by how much$-$if Bourne had used FIFO to account for its inventories?

$4.$ What were the LIFO liquidation profits reported in $\backslash (20\backslash$times $3\backslash )$ both pre$-$tax and after$-$tax?

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