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 750 units @ $33 2,700 units @ $38 950 units@ $41 During Year 2, Parvin sold 4,000 units of inventory at $90 per unit and incurred $45,000 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 $82,000, inventory of $24,750, common stock of $57,000, and retained earnings of $49,750. Income tax paid using FIFO Income tax paid using LIFO c. Determine the amount of income tax that Parvin would pay using each cost flow method.

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 750 units @ $33 2,700 units @ $38 950 units@ $41 During Year 2, Parvin sold 4,000 units of inventory at $90 per unit and incurred $45,000 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 $82,000, inventory of $24,750, common stock of $57,000, and retained earnings of $49,750. Income tax paid using FIFO Income tax paid using LIFO c. Determine the amount of income tax that Parvin would pay using each cost flow method.

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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Taraz Company started a business at the beginning of Year 1. Inventory purchases and sales during the first four years of the company's business are as follows: Year 1 Year 2 Year 3 Year 4 Units Purchased 100 50 200 200 Cost per Unit $1.00 1.50 2.50 5.00 Units Sold 30 100 150 160 Taraz Company uses LIFO inventory valuation. 13. Compute Taraz Company's ending inventory as of the end of Year 4. [Note: Your answer should be in dollars, NOT in units.]
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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 400 units @ $30 2,000 units @ $35 600 units @ $38 During Year 2, Parvin sold 2,700 units of inventory at $90 per unit and incurred $41,500 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 $75,000, inventory of $12,000, common stock of $50,000, and retained earnings of $37,000: .Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus ign.) PARVIN Company Cash Flows from Operating Activities Cash flows from operating activities: Cash inflow from customers Cash outflow for inventory Cash outflow for operating expenses…
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