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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%

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
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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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? % %
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 $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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