Module 6a Section 4

Module 6a Section 4 - M odule 6A Homewor k Notice m yBusine...

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2/24/13 Module 6A Homework platform.mybusinesscourse.com/mod/quiz/review.php?attempt=44576&page=3# 1/2 You are logged in as Brandon Dieterle ( Logout ) Home ACCT 6015 - Winter 13 Module 6 Module 6A Homework Question 4 Correct Mark 20.00 out of 20.00 Flag question Analyzing an Inventory Footnote Disclosure General Electric Company reports the following footnote in its 10-K report. December 31 (in millions) 2010 2009 Raw materials and work in process $ 6,973 $ 7,581 Finished goods 4,435 4,105 Unbilled shipments 456 759 11,864 12,445 Less rev aluation to LIFO (404) (529) $ 11,460 $ 11,916 The company reports its inventories using the LIFO inventory costing method. (a) What is the balance in inventories reported on GE's 2010 balance sheet? $ 11460 (million) (b) What would GE's 2010 balance sheet have reported for inventories had the company used FIFO inventory costing? $ 11864 (million) (c) What cumulative effect has GE's choice of LIFO over FIFO had on its pretax income as of year end 2010? The cumulative effect is that pretax income has not changed. LIFO and FIFO are simply two different ways to account for inventories. Both methods lead to the same pretax income.
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Module 6a Section 4 - M odule 6A Homewor k Notice m yBusine...

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