d. Assume the company has a 35% income tax rate for years prior to 2017 and a 21% rate thereaft ITW's LIFO reserve was $86 million at December 31, 2016. As of the 2018 year-end, how much the company saved in taxes by choosing the LIFO over FIFO method for costing inventory? Has t. use of LIFO increased or decreased the company's cumulative taxes paid? e. What effect has the use of LIFO inventory costing had on the company's pretax income and tax pense for 2018 only (assume a 21% income tax rate)?
d. Assume the company has a 35% income tax rate for years prior to 2017 and a 21% rate thereaft ITW's LIFO reserve was $86 million at December 31, 2016. As of the 2018 year-end, how much the company saved in taxes by choosing the LIFO over FIFO method for costing inventory? Has t. use of LIFO increased or decreased the company's cumulative taxes paid? e. What effect has the use of LIFO inventory costing had on the company's pretax income and tax pense for 2018 only (assume a 21% income tax rate)?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...
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