During Year 3, Parvin sold 3,485 units of inventory at $44 per unit and incurred $15,100 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 $87,000, inventory of $6,000, common stock of $68,000, and retained earnings of $25,000.

Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Beginning inventory 400 units @ $15 2,900 units @ $20 Apr. 1 Oct. 1 Purchased Purchased 800 units @ $21 During Year 3, Parvin sold 3,485 units of inventory at $44 per unit and incurred $15,100 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 $87,000, inventory of $6,000, common stock of $68,000, and retained earnings of $25,000. Required 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 LIFO Sales Cost of goods sold Gross margin Operating expenses Income before tax Income tax expense Net income 0 0 b. Determine the amount of income tax that Parvin would pay using each cost flow method. FIFO LIFO Income tax c. Determine the cash flow from operating activities under FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount. Cash outflows should be indicated with minus sign.) FIFO LIFO Net cash flow from operating activities