LO2 E6-29. Reformulating Balance Sheet and Income Statement Items for LIFO to FIFO ADJUSTMENTS 6.1 In...
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LO2 E6-29. Reformulating Balance Sheet and Income Statement Items for LIFO to FIFO ADJUSTMENTS 6.1 In its December 2016 10-K, Phillips 66 reported the following information ($ millions). PHILLIPS 66 (PSX) 2016 Assets 2016 Inventories 2016 LIFO Reserve 2016 Increase in LIFO Reserve Tax Rate $51,653 $3,300 $2,000 a. Determine the necessary adjustments to the following balance sheet line items. i. Inventories ii. Total assets iii. Tax liabilities iv. Equity PHILLIPS 66 (PSX) $3,150 b. Determine the necessary adjustments to the following income statement line items. i. Cost of goods sold ii. Pretax income iii. Income tax expense iv. Net Income LO2, 3 E6-30. Calculating Inventory Ratios for LIFO versus FIFO ADJUSTMENTS 6.1 c. Compute the common-size inventories with LIFO and with FIFO. (Hint: Compute inventory as per- cent of total assets.) Do we believe the difference is material? Explain. 35% Refer to the information for Phillips 66 in E6-29 along with the following information ($ millions). $48,580 2015 Assets 2016 Revenue 2015 Inventories 2016 Cost of Goods Sold 2016 Net Income $70,898 $3,477 $67,050 $1,644 a. Recast inventories and cost of goods sold using FIFO for 2016. b. Compute the following ratios for 2016, under both LIFO and FIFO. Comment on whether they differ materially. i. Gross margin percentage ii. Days inventory outstanding (DIO) iii. Return on assets (ROA) LO2 E6-29. Reformulating Balance Sheet and Income Statement Items for LIFO to FIFO ADJUSTMENTS 6.1 In its December 2016 10-K, Phillips 66 reported the following information ($ millions). PHILLIPS 66 (PSX) 2016 Assets 2016 Inventories 2016 LIFO Reserve 2016 Increase in LIFO Reserve Tax Rate $51,653 $3,300 $2,000 a. Determine the necessary adjustments to the following balance sheet line items. i. Inventories ii. Total assets iii. Tax liabilities iv. Equity PHILLIPS 66 (PSX) $3,150 b. Determine the necessary adjustments to the following income statement line items. i. Cost of goods sold ii. Pretax income iii. Income tax expense iv. Net Income LO2, 3 E6-30. Calculating Inventory Ratios for LIFO versus FIFO ADJUSTMENTS 6.1 c. Compute the common-size inventories with LIFO and with FIFO. (Hint: Compute inventory as per- cent of total assets.) Do we believe the difference is material? Explain. 35% Refer to the information for Phillips 66 in E6-29 along with the following information ($ millions). $48,580 2015 Assets 2016 Revenue 2015 Inventories 2016 Cost of Goods Sold 2016 Net Income $70,898 $3,477 $67,050 $1,644 a. Recast inventories and cost of goods sold using FIFO for 2016. b. Compute the following ratios for 2016, under both LIFO and FIFO. Comment on whether they differ materially. i. Gross margin percentage ii. Days inventory outstanding (DIO) iii. Return on assets (ROA)
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Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
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