The following information comes from the 2010 Occidental Petroleum Corporation annual report to shareholders:
NOTE 4 INVENTORIES
Net carrying values of inventories valued under the LIFO method were approximately $177 million and $175 million at December 31, 2010 and 2009, respectively. Inventories in continuing operations consisted of the following: ($ in millions) The LIFO reserve indicates that inventories would have been $72 million and $81 million higher at the end of 2010 and 2009, respectively, if Occidental Petroleum had used FIFO to value its entire inventory.
Required:
If Occidental Petroleum had used FIFO to value its entire inventory how would its 2010 pre-tax income be affected?

Question

The following information comes from the 2010 Occidental Petroleum Corporation annual report to shareholders:
NOTE 4 INVENTORIES
Net carrying values of inventories valued under the LIFO method were approximately $177 million and $175 million at December 31, 2010 and 2009, respectively. Inventories in continuing operations consisted of the following: ($ in millions)  The LIFO reserve indicates that inventories would have been $72 million and $81 million higher at the end of 2010 and 2009, respectively, if Occidental Petroleum had used FIFO to value its entire inventory.
Required:
If Occidental Petroleum had used FIFO to value its entire inventory how would its 2010 pre-tax income be affected?

Quizplus · Accepted Answer

The Answer of The following information comes from the 2010 Occidental Petroleum Corporation annual report to shareholders:
NOTE 4 INVENTORIES
Net carrying values of inventories valued under the LIFO method were approximately $177 million and $175 million at December 31, 2010 and 2009, respectively. Inventories in continuing operations consisted of the following: ($ in millions)  The LIFO reserve indicates that inventories would have been $72 million and $81 million higher at the end of 2010 and 2009, respectively, if Occidental Petroleum had used FIFO to value its entire inventory.
Required:
If Occidental Petroleum had used FIFO to value its entire inventory how would its 2010 pre-tax income be affected?

The Following Information Comes from the 2010 Occidental Petroleum Corporation