[The following information applies to the questions displayed below.) The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Beginning inventory Apr. 1 Oct. 1 Purchased Purchased 500 units @ $20 2,500 units @ $25 1,200 units @ $26 During Year 3, Parvin sold 3,570 units of inventory at $42 per unit and incurred $16,200 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 $80,500, Inventory of $10,000, common stock of $67,000, and retained earnings of $23,500. Required: a. Prepare income statements using FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount.) Sales PARVIN COMPANY Income Statements For the Year Ended December 31, Year 3 FIFO LIFO 149,940 $ 149,940 Cost of goods sold Gross margin Operating expenses 16,200 Income before tax (16,200) 16,200 (16,200) Income tax expense Net income Required information 3 [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Apr. 1 Oct. 1 Beginning inventory 500 units @ $20 2,500 units @ $25 1,200 units @ $26 Purchased Purchased During Year 3, Parvin sold 3,570 units of inventory at $42 per unit and incurred $16,200 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 $80,500, inventory of $10,000, common stock of $67,000, and retained earnings of $23,500. b. Determine the amount of income tax that Parvin would pay using each cost flow method. FIFO LIFO Income tax Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Beginning inventory Apr. 1 Oct. 1 Purchased Purchased 500 units @$20 2,500 units @ $25 1,200 units @$26 During Year 3, Parvin sold 3,570 units of inventory at $42 per unit and incurred $16,200 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 $80,500, inventory of $10,000, common stock of $67,000, and retained earnings of $23,500. c. Determine the cash flow from operating activities under FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount. Cash outflows should be indicated with minus sign.) FIFO Net cash flow from operating activities LIFO