4 Part 1 of 3 12.5 points Required information Exercise 5-6 Income tax effect of shifting from FIFO to LIFO LO 5-1 [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Apr. 1 Oct. 1 Beginning inventory Purchased Purchased 400 units @ $22 2,500 units @ $27 900 units @ $28 eBook Print o References During Year 3, Parvin sold 3,230 units of inventory at $40 per unit and incurred $17,600 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 $74,700, inventory of $8,800, common stock of $60,000, and retained earnings of $23,500. Exercise 5-6 Part a a. Prepare income statements using FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount.) PARVIN COMPANY Income Statements For the Year Ended December 31, Year 3 Sales Cost of goods sold Gross margin Income before tax FIFO LIFO $ 129,200 $ 129,200