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 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 a Required Record the above transactions in general journal form and post to T-accounts using (1) FIFO and (2) LIFO. Use a separate set of journal entries and T-accounts for each method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) FIFO View transaction list View journal entry worksheet LIFO View transaction list X: 1 > Record entry merchandise inventory purchased for cash. 2 Record entry merchandise inventory purchased for cash. 3 Record sale of inventory for cash. 4 Record entry for cost of goods sold. 5 Record entry for operating expenses paid. Credit 6 Record entry for income tax expenses paid. Note: = journal entry has been entered Record entry Clear entry View general journal