General Electric CompanyEdited Inventory Note(millions of d

General Electric CompanyEdited Inventory Note(millions of dollars)                                                            2011      2010Raw materials and work in process $ 4,894 $ 4,708Finished goods                                    4,379   3,951Unbilled shipments                               372     312                                                         9,645     8,972Less revaluation to LIFO                 (606)       (676)                                                     $ 9,039     $ 8,295LIFO revaluations decreased $70 million in 2011, compared with decreasesof $169 million in 2010 and $82 million in 2009. Included in these changeswere decreases of $21 million, $8 million and $6 million in 2011, 2010 and2009, respectively that resulted from lower LIFO inventory levels. Therewere net cost decreases in each of the last three years. GE’s earnings beforeincome taxes were $18.891 billion in 2011. Assume a 35% marginal tax rate.Requirements:1. What are the total cumulative tax savings as of December 31, 2011 thatGE has realized as a result of using the LIFO inventory method?2. What would GE’s pre-tax earnings have been in 2011 if it had been usingFIFO?3. What December 31, 2011 balance sheet figures would be different and byhow much if GE had used FIFO to account for its inventories?4. What were the LIFO liquidation profits reported in 2011 both pre-tax andafter-tax?5. Explain what factors cause the difference between the LIFO pre-taxincome number and the FIFO pre-tax income number you estimated inrequirement 2. (Hint: Reconcile the change in the LIFO reserve for 2011.)