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. Determine the cash flow from operating activities under FIFO and LIFO.

. Determine the cash flow from operating activities under FIFO and LIFO.

FINANCIAL ACCOUNTING
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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The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 October 1 450 units@ $32 2,250 units @ $37 650 units@ $40 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,000 units of inventory at $95 per unit and incurred $47,500 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 40 percent income tax rate. Parvin started the period with cash of $87,000, inventory of $14,400, common stock of $62,000, and retained earnings of $39,400. d. Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus sign.) Parvin Company Cash Flows from Operating Activities FIFO LIFO
Transcribed Image Text:The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 October 1 450 units@ $32 2,250 units @ $37 650 units@ $40 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,000 units of inventory at $95 per unit and incurred $47,500 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 40 percent income tax rate. Parvin started the period with cash of $87,000, inventory of $14,400, common stock of $62,000, and retained earnings of $39,400. d. Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus sign.) Parvin Company Cash Flows from Operating Activities FIFO LIFO
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