Required information Exercise 5-6A 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 during Year 2: Jan. 1 Apr. 1 Oct. 1 Beginning Inventory Purchased Purchased 600 units @ $ 38 2,550 units @ $ 43 800 units @ $46 During Year 2, Parvin sold 3,600 units of inventory at $85 per unit and incurred $49,000 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 $90,000 inventory of $22,800, common stock of $65,000, and retained earnings of $47,800. ! Required information b. Prepare income statements using FIFO and LIFO. PARVIN COMPANY Income Statements For the Year Ended December 31, Year 2 FIFO Cost of goods sold: Cost of goods sold 0 0 $ LIFO Cost of goods sold: