Real World Analysis British Petroleum Company (BP) is the parent company of one of the world's largest inter- national petroleum and petrochemical groups. BP also has interests in nutrition. BP provides the following state- ment in note 1 to its Year 8 annual report, prepared in accordance with IFRS. The accounts are prepared under the historic cost convention... Profit and loss determined under the his- toric cost convention includes stock holding gains and losses and, as a consequence, does not necessarily reflect underlying trading credits. Stock holding gains or losses represent the difference between the replacement cost of sales and the historical cost of sales calculated using the first-in, first-out method. BP's income statement reports the following pretax figures. $ millions Replacement cost operating profit. Stock holding gains (losses).. Total ... ********* Year 8 $7,371 (1,391) $5,980 Year 7 $10,811 (939) $ 9,872 Required a. Identify a more descriptive title for the amount reported as "Total." b. Estimate BP's income for Year 8 if BP used a LIFO cost-flow assumption to value its inventories.

Real World Analysis British Petroleum Company (BP) is the parent company of one of the world's largest inter- national petroleum and petrochemical groups. BP also has interests in nutrition. BP provides the following state- ment in note 1 to its Year 8 annual report, prepared in accordance with IFRS. The accounts are prepared under the historic cost convention... Profit and loss determined under the his- toric cost convention includes stock holding gains and losses and, as a consequence, does not necessarily reflect underlying trading credits. Stock holding gains or losses represent the difference between the replacement cost of sales and the historical cost of sales calculated using the first-in, first-out method. BP's income statement reports the following pretax figures. $ millions Replacement cost operating profit. Stock holding gains (losses).. Total ... ********* Year 8 $7,371 (1,391) $5,980 Year 7 $10,811 (939) $ 9,872 Required a. Identify a more descriptive title for the amount reported as "Total." b. Estimate BP's income for Year 8 if BP used a LIFO cost-flow assumption to value its inventories.

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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