Chapter 5 Homework 1 Part 1 of 3 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.) 11.11 points 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 @ $17 3,000 units @ $22 900 units @ $23 eBook Print During Year 3, Parvin sold 3,655 units of inventory at $41 per unit and incurred $19,000 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 $54,200, inventory of $6,800, common stock of $36,000, and retained earnings of $25,000. References Exercise 5-6 Part a 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 FIFO L IFO Income before tax