Question: The following note was taken from the 2004 financial statements of Walgreen Company: Inventories are valued on a last-in, first-out (lifo) cost basis. At August 31, 2004 and 2003, inventories would have been greater by $736,400,000 and $729,700,000 respectively, if they had been valued on a lower of first-in, first-out (fifo) cost or market basis. Additional data are as follows:
Earnings before income taxes, 2004 $2,176,300,000
Total lifo inventories, August 31, 2004 4,738,600,000
Based on the preceding data, determine
(a) what the total inventories at August 31, 2004, would have been, using the fifo method, and
(b) what the earnings before income taxes for the year ended August 31, 2004, would have been if fifo had been used instead of lifo.