3. 3a. Castillo Corporation has maintained a periodic inventory system and used the LIFO cost flow alternative for years. The earliest layers of LIFO inventory date back 15 years. The company had beginning inventory at January 1, 2021, consisting of three layers, starting with the oldest layer of 150,000 units. UNITS UNIT COST TOTAL COST 150,000 $10 $1,500,000 80,000 12 960,000 15,000 245,000 20 300,000 $2,760,000 During the year, an involuntary reduction of inventory occurred. Ending inventory dropped to 120,000 units. The current replacement value of those units is $35 per unit. The appropriate tax rate is 27%. 3a. Provide two examples of possible involuntary reductions of inventory. Provide two examples of voluntary reductions of inventory. 3b. Determine the after-tax change in income. Show labelled work. 3c. What needs to be disclosed in the notes and why? On January 1, 2018, Toups Inc. changed from FIFO to LIFO for income tax and external reporting purposes. At that date, the beginning FIFO inventory was $75,000. See the following information from Toups's records. Year Ending Inventory at FIFO Index 2018 $ 75,000 1.00 2019 88,000 1.10 2020 100,000 1.15 2021 75,000 1.20 2022 88,000 1.25 3d. Prepare a table similar to the notes to show how you arrived at ending inventory at dollar value LIFO. 3e. Write the necessary adjusting entries to adjust the LIFO Reserve for each year