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L06-2 E6-38. Adjusting Balance Sheet and Income Statement for LIFO to FIFO ANALYST AdJUstmENTS 6.1...

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Accounting

L06-2 E6-38. Adjusting Balance Sheet and Income Statement for LIFO to FIFO ANALYST AdJUstmENTS 6.1
PHILLIPS 66
(PSX)
In a recent 10-K, Phillips 66 reported the following information ( $ millions).
a. Determine necessary adjustments to the following balance sheet line items for the current fiscal year.
i. Inventories
ii. Total assets
iii. Tax liabilities
iv. Retained earnings
b. Determine the necessary adjustments to the following income statement line items for the current
fiscal year.
i. Cost of goods sold
ii. Pretax income
iii. Income tax expense
iv. Net income
c. Compute the common-size inventories with LIFO and with FIFO for the current fiscal year. (Hint:
Compute inventory as percent of total assets.) Do we believe the difference is material? Explain.
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