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 $2,320 22% a. Determine the necessary adjustments to the following balance sheet line items for 2019. Note: Round your answers to the nearest whole dollar. Inventories Total assets Adjustment ($ in millions) $ 3,440 $ 3,440 246.4 $ 3,193.6 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 $ (1,120) Pretax income $ 1,120 Income tax expense $ 246.4 Net income $ 873.6 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 6.4% 12.8% Do we believe the difference is material? Yes =
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 $2,320 22% a. Determine the necessary adjustments to the following balance sheet line items for 2019. Note: Round your answers to the nearest whole dollar. Inventories Total assets Adjustment ($ in millions) $ 3,440 $ 3,440 246.4 $ 3,193.6 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 $ (1,120) Pretax income $ 1,120 Income tax expense $ 246.4 Net income $ 873.6 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 6.4% 12.8% Do we believe the difference is material? Yes =
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 9PB: Elegant Linens uses the balance sheet aging method to account for uncollectible debt on receivables....
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