Chevron Case - Chevron Case 14121 2983 2 4121 4846 = 8967...

Info icon This preview shows page 1. Sign up to view the full content.

Chevron Case 1 4121, 2983 2. 4121 + 4846 = 8967 2983 + 3036 = 6019 3. Went up. Oil price went up quickly 4. 4846 * 40% = 1938.4 5. Higher net income. 2004: 3036-2106 = 930 930*0.6 = 558 2005: 4846-3036 = 1810 1810*0.6 = 1086 6. Inventory turnover= [(2983-4121)+127948]/[(4121+2983)/2] = 35.7 Under FIFO: Inventory turnover = (127948-1810)/ [(8967+6019)/2] = 16.83 LIFO is better measure Chevron’s investment in inventory relative to sales.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 7. LIFO advantages: Provide better measurement of current earning and make the year to year net income comparable, It gives company tax benefit. LIFO disadvantages: Reduce company’s earning and under value the inventories at the same time. Earnings can be manipulated by last time purchase....
View Full Document

  • Spring '14
  • Rountree,BrianR.
  • Revenue, Net Income, FIFO and LIFO accounting

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern