ACCT 6610 Group Assignment Analysis of ExxonMobile Inventories

Obtain a copy of ExxonMobil’s 2011 10-K, which was filed with the SEC on February 24, 2012. According to ExxonMobile’s description of their business, “ExxonMobil is a major manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. ExxonMobil also has interests in electric power generation facilities.” Using information in the financial statements and footnotes respond to the following questions in the spaces provided. You must show the details of your computations to be eligible for partial credit.

Answer questions for 2011 only, unless specifically asked to do otherwise. Limit you analysis to ExxonMobile’s crude oil, products and merchandise. Ignore materials and supplies.

Assume a 35% tax rate if needed.

1. As of the end of 2011, what is the cumulative amount of the holding gain ExxonMobile has experienced on its inventories accounted for using LIFO? What is the cumulative amount at the end of 2010? Which footnote provided the information to answer this question? (3 points)

• In millions of dollars (see table below). • [pic] (1 point each) • Footnote #3 “Miscellaneous Financial Information” (1 point) • The cumulative holding gain is called the ‘aggregate replacement cost’ in the inventory footnote

2. Estimate the replacement cost of ExxonMobile’s crude oil, products and merchandise as at the end of 2011 and 2010. What was their average inventory balance using the reported amounts? What was their average inventory balance using the replacement cost amounts? (6 points – 2 points for each year, 1 point for each avg. inventory)

[pic]

3. Starting with ExxonMobile’s reported assets, liabilities and equity show how