Adjusting Balance Sheet and Income Statement for LIFO to FIFO In its December 2019 10-K, Phillips 66 reported the following information ($ millions). 2019 Assets 2019 Inventories 2019 LIFO Reserve 2018 LIFO Reserve Tax Rate $64,592 $4,154 $4,730 $3,190 22% a, Determine the necessary adjustments to the following balance sheet line items for 2019. Note: Round your answers to the nearest whole dollar. Adjustment (S in millions) 24 Inventories Total assets %$4 Deferred tax liabilities $ Equity 24 b. Determine the necessary adjustments to the following income statement line items for 2019. Note: Round your answers to the nearest whole dollar. Adjustment (S in millions) Cost of goods sold %24 Income tax expense $ Pretax income Net income 24 c. Compute the common-size inventories percentage with LIFO and with FIFO for 2019. Hint: Compute inventory as percent of total assets. Note: Round the percentage to one decimal place (for example, enter 14.6% for 14.55555%). Common size inventories percentage with LIFO for 2019 0 % Common size inventories percentagewith FIFO for 2019 0 % Do we believe the difference is material?

Adjusting Balance Sheet and Income Statement for LIFO to FIFO In its December 2019 10-K, Phillips 66 reported the following information ($ millions). 2019 Assets 2019 Inventories 2019 LIFO Reserve 2018 LIFO Reserve Tax Rate $64,592 $4,154 $4,730 $3,190 22% a, Determine the necessary adjustments to the following balance sheet line items for 2019. Note: Round your answers to the nearest whole dollar. Adjustment (S in millions) 24 Inventories Total assets %$4 Deferred tax liabilities $ Equity 24 b. Determine the necessary adjustments to the following income statement line items for 2019. Note: Round your answers to the nearest whole dollar. Adjustment (S in millions) Cost of goods sold %24 Income tax expense $ Pretax income Net income 24 c. Compute the common-size inventories percentage with LIFO and with FIFO for 2019. Hint: Compute inventory as percent of total assets. Note: Round the percentage to one decimal place (for example, enter 14.6% for 14.55555%). Common size inventories percentage with LIFO for 2019 0 % Common size inventories percentagewith FIFO for 2019 0 % Do we believe the difference is material?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Adjusting Balance Sheet and Income Statement for LIFO to FIFO
In its December 2019 10-K, Phillips 66 reported the following information ($ millions).
2019 Assets 2019 Inventories 2019 LIFO Reserve 2018 LIFO Reserve Tax Rate
$64,592
$4,154
$4,730
$3,190
22%
a. Determine the necessary adjustments to the following balance sheet line items for 2019.
Note: Round your answers to the nearest whole dollar.
Adjustment ($ in millions)
Inventories
0.
Total assetS
Deferred tax liabilities $
0.
Equity
b. Determine the necessary adjustments to the following income statement line items for 2019.
Note: Round your answers to the nearest whole dollar.
Adjustment ($ in millions)
Cost of goods sold
Pretax income
0.
Income tax expense $
0.
Net income
c. Compute the common-size inventories percentage with LIFO and with FIFO for 2019.
Hint: Compute inventory as percent of total assets.
Note: Round the percentage to one decimal place (for example, enter 14.6% for 14.55555%).
Common size inventories percentage with LIFO for 2019
Common size inventories percentagewith FIFO for 2019
Do we believe the difference is material?
Please answer all parts of the question.
%24
%24
%24
%24

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