11 Problem: Module 2 Textbook Problem 11 Learning Objective: 2.7 Show how different inventory cost flow methods (specific identification, FIFO, LIFO, and weighted average) affect financial statements The following information pertains to the inventory of Parvin Company: points Jan. 1 Apr. 1 Oct. 1 Beginning inventory Purchased Purchased 400 unita 2,900 units 1,000 units e $19 e $24 @ $25 During the year, Parvin sold 3,655 units of inventory at $42 per unit and incurred $15,700 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 $100,900, inventory of $7,600, common stock of $84,000, and retained earnings of $24,500 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. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare income statements using FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount.) 11 Complete this question by entering your answers in the tabs below. 1 points Required A Required B Required Prepare Income statements using FIFO and LIFO. (Round Intermediate calculations and final answer dollar amount.) PARVIN COMPANY Income Statements For the Year Ended December 31 FIFO LIFO 153,510 153,510 Sales Cost of goods sold Gross margin Income before tax 0 0 Required B >