The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory 500 units...
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The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory 500 units 2,800 units Purchased Purchased 1,100 units Apr. 1 Oct. 1 $19 $24 $25 During the year, Parvin sold 3,740 units of inventory at $42 per unit and incurred $18,800 of operating expenses, Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 30 percent income tax rate. Parvin started the period with cash of $168,500, inventory of $9,500, common stock of $154,000, and retained earnings of $24,000. Required a. Prepare income statements using FIFO and LIFO. b. Determine the amount of income tax that Parvin would pay using each cost flow method. c. Determine the cash flow from operating activities under FIFO and LIFO. The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory 500 units 2,800 units Purchased Purchased 1,100 units Apr. 1 Oct. 1 $19 $24 $25 During the year, Parvin sold 3,740 units of inventory at $42 per unit and incurred $18,800 of operating expenses, Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 30 percent income tax rate. Parvin started the period with cash of $168,500, inventory of $9,500, common stock of $154,000, and retained earnings of $24,000. Required a. Prepare income statements using FIFO and LIFO. b. Determine the amount of income tax that Parvin would pay using each cost flow method. c. Determine the cash flow from operating activities under FIFO and LIFO.
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a b C Sales Cost of goods sold Gross profit Operating expenses Income before tax Tax at 30 Net profi... View the full answer
Related Book For
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
Posted Date:
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