Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3: Beginning inventory 400 units @ $16 Purchased 2,500 units @ $21 Purchased 1,100 units @ $22 January 1 April 1 October 1 During Year 3, Parvin sold 3,400 units of inventory at $41 per unit and incurred $17,900 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 $49,100, inventory of $6,400, common stock of $31,000, and retained earnings of $24,500. b. Determine the amount of income tax that Parvin would pay using each cost flow method. Income tax FIFO LIFO

Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3 : During Year 3, Parvin sold 3,400 units of inventory at $41 per unit and incurred $17,900 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 $49,100, inventory of $6,400, common stock of $31,000. and retained earnings of $24,500. b. Determine the amount of income tax that Parvin would pay using each cost flow method