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 400 units # $30 2,000 units $35 600 unito $38 During Year 2, Parvin sold 2,700 units of inventory at $90 per unit and incurred $41,500 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 $75,000, inventory of $12,000, common stock of$50,000, and retained earnings of $37,000. Exercise 5-6A Part a nicos Required a. 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 Journal entry worksheet 1 2 3 4 5 6 Record entry merchandise inventory purchased for cash. Note: Enter debits before credits. Date General Journal Debit Credit Apr 01 Record entry Clear entry View general journal Required information FIFO Cash Merchandise Inventory Beg. Bal Beg. Bal End. Bal End. Bal Common Stock Retained Earnings Beg. Bal Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold Beg. Bal Beg. Bal End. Bal End. Bal Operating Expenses Income Tax Expense Beg. Bal Beg Bal End. Bal End. Bal LIFO View transaction list Journal entry worksheet 1 2 3 4 5 6 Record entry merchandise inventory purchased for cash. Note: Enter debits before credits. Date General Journal Debit Credit Apr 01 Record entry Clear entry View general journal Required information LIFO Cash Merchandise Inventory Beg. Bal Beg. Bal End. Bal End. Bal Common Stock Retained Earnings Beg. Bal Beg. Bal End. Bal End. Bal Sales Revenue Cost of Goods Sold Beg. Bal Beg. Bal End. Bal End, Bal Operating Expenses Income Tax Expense Bog. Bal Beg. Bal End Bal End. Bal