The following information related to ExxonMobil's inventories is taken from its 2014 annual report.3. Miscellaneous Financial InformationIn 2014, 2013, and 2012, net income included gains of $187 million, $282 million, and $328 millionrespectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. Theaggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $10.6 billionand $21.2 billion at December 31, 2014 and 2013, respectivelyCrude oil, products, and merchandise as of year-end 2014 and 2013 consist of the following($ in billions)2014 2013Petroleum products $4.1$3.9Crude oil4.64.7Chemical products2.92.9Gas/other0.80.6Total$12.4 $12.1Required:page 4971. By how much would net income for 2014 have differed had ExxonMobil used FIFO to valuethose inventory items valued under LIFO? Assume a 35% marginal tax rate. Be sure to indicate whetherFIFO income would be higher or lower than LIFO income2. What would the LIFO reserve have been on December 31, 2014, if no drawdowns had occurred in 2014?The drawdowns represent LIFO liquidations3. What was the net difference in 2014 income taxes that ExxonMobil experienced as a result of using LIFOrather than FIFO? Assume a 35% tax rate and indicate whether FIFO or LIFO would yield the higher taxand by how much4. What was the approximate rate of change in input costs in 2014 for ExxonMobil's inventory?

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Asked Nov 13, 2019
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The following information related to ExxonMobil's inventories is taken from its 2014 annual report.
3. Miscellaneous Financial Information
In 2014, 2013, and 2012, net income included gains of $187 million, $282 million, and $328 million
respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The
aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $10.6 billion
and $21.2 billion at December 31, 2014 and 2013, respectively
Crude oil, products, and merchandise as of year-end 2014 and 2013 consist of the following
($ in billions)
2014 2013
Petroleum products $4.1
$3.9
Crude oil
4.6
4.7
Chemical products
2.9
2.9
Gas/other
0.8
0.6
Total
$12.4 $12.1
Required:
page 497
1. By how much would net income for 2014 have differed had ExxonMobil used FIFO to value
those inventory items valued under LIFO? Assume a 35% marginal tax rate. Be sure to indicate whether
FIFO income would be higher or lower than LIFO income
2. What would the LIFO reserve have been on December 31, 2014, if no drawdowns had occurred in 2014?
The drawdowns represent LIFO liquidations
3. What was the net difference in 2014 income taxes that ExxonMobil experienced as a result of using LIFO
rather than FIFO? Assume a 35% tax rate and indicate whether FIFO or LIFO would yield the higher tax
and by how much
4. What was the approximate rate of change in input costs in 2014 for ExxonMobil's inventory?
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The following information related to ExxonMobil's inventories is taken from its 2014 annual report. 3. Miscellaneous Financial Information In 2014, 2013, and 2012, net income included gains of $187 million, $282 million, and $328 million respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $10.6 billion and $21.2 billion at December 31, 2014 and 2013, respectively Crude oil, products, and merchandise as of year-end 2014 and 2013 consist of the following ($ in billions) 2014 2013 Petroleum products $4.1 $3.9 Crude oil 4.6 4.7 Chemical products 2.9 2.9 Gas/other 0.8 0.6 Total $12.4 $12.1 Required: page 497 1. By how much would net income for 2014 have differed had ExxonMobil used FIFO to value those inventory items valued under LIFO? Assume a 35% marginal tax rate. Be sure to indicate whether FIFO income would be higher or lower than LIFO income 2. What would the LIFO reserve have been on December 31, 2014, if no drawdowns had occurred in 2014? The drawdowns represent LIFO liquidations 3. What was the net difference in 2014 income taxes that ExxonMobil experienced as a result of using LIFO rather than FIFO? Assume a 35% tax rate and indicate whether FIFO or LIFO would yield the higher tax and by how much 4. What was the approximate rate of change in input costs in 2014 for ExxonMobil's inventory?

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