Note:-• Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.• Answer completely.• You will get up vote for sure. Adjusting Balance Sheet and Income Statement for LIFO to FIFOIn its December 2019 10-K, Phillips 66 reported the following information ($ millions).2019 Assets 2019 Inventories 2019 LIFO Reserve 2018 LIFO Reserve Tax Rate$46,976$3,021$3,440$2,32022%a. Determine the necessary adjustments to the following balance sheet line items for 2019.Note: Round your answers to the nearest whole dollar.Adjustment ($ in millions)Inventories$Total assets$Deferred tax liabilities $Equity$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 soldPretax incomeIncome tax expenseNet 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 2019Common size inventories percentage with FIFO for 2019Do we believe the difference is material?%%

It is the stock held for sale to customers. The inventory comprises of raw materials, work in…

Answered: In its December 2019 10-K, Phillips 66…

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 $46,976 $3,021 $3,440 $2,320 22%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Note:- • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. • Answer completely. • You will get up vote for sure.

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
$46,976
$3,021
$3,440
$2,320
22%
a. Determine the necessary adjustments to the following balance sheet line items for 2019.
Note: Round your answers to the nearest whole dollar.
Adjustment ($ in millions)
Inventories
$
Total assets
$
Deferred tax liabilities $
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
Income tax expense
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 percentage with FIFO for 2019
Do we believe the difference is material?
%
%

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Step 3: (b) Determine the necessary adjustments to the income statement line items for 2019:

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Step 4: (c) Compute the common size inventories percentage with LIFO and with FIFO for 2019:

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