Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 October 1 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,500 units of inventory at $80 per unit and incurred $46,000 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 $84,000, inventory of $11,100, common stock of $59,000, and retained earnings of $36,100. 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 300 units @ $37 2,900 units @ $42 500 units @ $45 Cash flows from operating activities: Cash inflow from customers Cash outflow for inventory Cash outflow for operating expenses Cash outflow for income tax expense Net cash flow from operating activities $ 280,000 $ $ (46,000) (26,280) 207,720 LIFO 280,000 (46,000) (25,800) $ 208,200

Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 October 1 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,500 units of inventory at $80 per unit and incurred $46,000 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 $84,000, inventory of $11,100, common stock of $59,000, and retained earnings of $36,100. 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 300 units @ $37 2,900 units @ $42 500 units @ $45 Cash flows from operating activities: Cash inflow from customers Cash outflow for inventory Cash outflow for operating expenses Cash outflow for income tax expense Net cash flow from operating activities $ 280,000 $ $ (46,000) (26,280) 207,720 LIFO 280,000 (46,000) (25,800) $ 208,200

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 is available for Tamarisk Corp. for the year ended December 31, 2022. Other revenues and gains $23,800 Other expenses and losses 4,000 Cost of goods sold 292,000 Sales discounts 4,600 Sales revenue 760,000 Operating expenses 221,000 Sales returns and allowances 10,800 Prepare a multiple-step income statement for Tamarisk Corp. The company has a tax rate of 25%.
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2 Nunez Company, a retail hardware store, began business in August and elected a calendar year for tax purposes. From August through December, Nunez paid $319,000 for inventory to stock the store. According to a physical inventory count on December 31, Nunez had $64,600 of inventory on hand. Required: a. Compute Nunez's cost of goods sold for its first year assuming Nunez adopted the cash method as its overall method of accounting. b. Compute Nunez's cost of goods sold for its first year assuming Nunez adopted the accrual method as its overall method of accounting. Complete this question by entering your answers in the tabs below. Required A Required B Compute Nunez's cost of goods sold for its first year assuming Nunez adopted the cash method as its overall method of accounting. Cost of goods sold