The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory Apr. 1 Purchased Oct. 1 Purchased During the year, Parvin sold 3,910 units of inventory at $45 per unit and incurred $17,100 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 $53,400, inventory of $7,600, common stock of $36,000, and retained earnings of $25,000. Required a. Prepare income statements using FIFO and LIFO. b. Determine the amount of income tax that Parvin would pay using each cost flow method. c. Determine the cash flow from operating activities under FIFO and LIFO. Required A Required B Complete this question by entering your answers in the tabs below. 400 units 3,000 units 1,200 units Required C PARVIN COMPANY Income Statements For the Year Ended December 31 FIFO Income before tax @ $19 @ $24 @ $25 Prepare income statements using FIFO and LIFO. (Round intermediate calculations and fina dollar amount.) LIFO

The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory Apr. 1 Purchased Oct. 1 Purchased During the year, Parvin sold 3,910 units of inventory at $45 per unit and incurred $17,100 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 $53,400, inventory of $7,600, common stock of $36,000, and retained earnings of $25,000. Required a. Prepare income statements using FIFO and LIFO. b. Determine the amount of income tax that Parvin would pay using each cost flow method. c. Determine the cash flow from operating activities under FIFO and LIFO. Required A Required B Complete this question by entering your answers in the tabs below. 400 units 3,000 units 1,200 units Required C PARVIN COMPANY Income Statements For the Year Ended December 31 FIFO Income before tax @ $19 @ $24 @ $25 Prepare income statements using FIFO and LIFO. (Round intermediate calculations and fina dollar amount.) LIFO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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