Analyzing Effects of LIFO on Inventory Turnover Ratios The current assets of Exxon Mobil Corporation follow: $ millions 2014 2013 Current assets Cash and cash equivalents $13,068 $8,453 Notes and accounts receivable, less estimated doubtful amounts 38,642 32,284 Inventories: Crude oil, products and merchandise 12,665 10,852 Materials and supplies 3,359 3,124 Other current assets 6,229 5,271 Total current assets $73,963 $59,984 In addition, the following note was provided in its 2014 10-K report: Inventories. Crude oil, products and merchandise inventories are carried at the lower of current market value or cost (generally determined under the last-in, first-out methodLIFO). Inventory costs include expenditures and other charges (including depreciation) directly and indirectly incurred in bringing the inventory to its existing condition and location. Selling expenses and general and administrative expenses are reported as period costs and excluded from inventory cost. Inventories of materials and supplies are valued at cost or less. In 2014, 2013, and 2012, net income included gains of $292 million, $317 million, and $207 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 $26.6 billion and $21.3 billion at December 31, 2014, and 2013, respectively. Required: a. Exxon Mobil reported pretax earnings of $73,257 million in 2014. What amount of pretax earnings would have been reported by the company if inventory had been reported using the FIFO costing method? $Answer 71,209 million b. Exxon Mobil reported cost of goods sold of $266,534 million in 2014. Compute its inventory turnover ratio for 2014 using total inventories. (Round your answer to one decimal place.) Answer 12.3 c. BP, p.l.c. (BP) reports its financial information using IFRS. For fiscal year 2014, BP reported cost of goods sold of $288,618 million, beginning inventory of $26,218 million and ending inventory of $25,661 million. Compute BP's inventory turnover ratio for fiscal year 2014. (Round your answer to one decimal place.) Answer 11.3 d. Compare your answers in parts b and c. BP cant use LIFO to report under IFRS, so, revise your calculations in such a way as to find out which company has faster inventory turnover. (Hint: Calculate Exxon Mobil's inventory turnover ratio as if Exxon Mobil used the FIFO costing method.)(Round your answer to one decimal place.