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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text: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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