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. Apr. 1 Oct. 1 Beginning Inventory Purchased Purchased 500 units @ $ 34 2,350 units @ $ 39 700 units @ $ 42 During Year 2, Parvin sold 3,200 units of inventory at $100 per unit and incurred $48,000 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 $88,000, inventory of $17,000, common stock of $63,000, and retained earnings of $42,000. Exercise 5-6A Part c c. Determine the amount of income tax that Parvin would pay using each cost flow method. Income tax paid using FIFO Income tax paid using LIFO