Question

Check my work Required information (The following information applies to the questions displayed below. uest itures An annual report for International Paper Company included the following note: The last-in, first-out inventory method is used to value most of International Paper's U.S. inventories... If the first-in, first-out method had been used, it would have increased total inventory balances by approximately $293 million and $290 million at December 31, 2017, and 2016, respectively. ed For the year 2017, International Paper Company reported net income (after taxes) of $2,144 million. At December 31, 2017, the balance of International Paper Company's retained earnings account was $6,180 million, 2. Determine the amount of retained earnings that International Paper would have reported at the end of 2017 if it always had used the FIFO method (assume a 30 percent tax rate). (Enter your answer in millions. Do not round your intermediate calculations. Round your final answer to the nearest whole number.) t million nces Retained earnings spend to can use p

Answer 1

Answer is given below with working

$6,385 million Retained Earnings Balance If FIFO was used $6,180.0 Working Retained Earnings Balance 2017 end Income of 2016 Higher closing stock Stock as per FIFO method Less: Tax at 30% $290.0 $87.00 $203.0 Income of 2017 Closing stock Opening stock Net Increase in Closing stock Less: Tax at 30% Total Retained Earnings Balance $293.0 $290.0 $3.0 $0.9 $2.1 $6,385.1 Higher closing stock leads to Higher income Opening stock will be offset with closing stock