During the yearParvin sold 3,740 units of inventory at $41 per unit and incurred $18,400 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 \$12/500 Inventory of common stock of \$113.000 , and retained eamings of $24,000

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 Jan 1 Apr 1 Oct. 1 Beginning inventory Purchased Purchased 500 units 2.000 units 1,100 units 519 $24 $25 During the year, Parvin sold 3,740 units of inventory at $41 per unit and incurred $18,400 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 $127.500, inventory of $9,500, common stock of $113,000, 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. Complete this question by entering your answers in the tabs below. Required A Required B Required Propare income statements using Fifo and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount.) PURVIE COUNTY Income statements For the Year Ended December 31 LIFO Salon $ 153,3401 $ 153,340 Cost of goods sold Gross margin Operating expenses 18.400 18,400 Income before tax (18.400) (18,400) Income tax expenso Not income Required o. 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 Determine the amount of income tax that Parvin would pay using each cost flow method: BEG LIFO Income tax 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 a Required Determine the cash flow from operating activities under FIFO and LIFO. (Round Intermediate calculations and final answers to the nearest whole dollar amount) FIFO LIFO Net cash flow from operating activities