t The following information pertains to the Inventory of Parvin Company January 1 Apr 11 1 Beginning inventory October 1 Purchased Purchased 300 3,000 units units $21 $26 900 units . $27 During the year, Parvin sold 3,570 units of Inventory at $42 per unit and incurred $15,500 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 $144,200, Inventory of $6,300, common stock of $127,000, and retained earnings of $23,500 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.

t The following information pertains to the Inventory of Parvin Company January 1 Apr 11 1 Beginning inventory October 1 Purchased Purchased 300 3,000 units units $21 $26 900 units . $27 During the year, Parvin sold 3,570 units of Inventory at $42 per unit and incurred $15,500 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 $144,200, Inventory of $6,300, common stock of $127,000, and retained earnings of $23,500 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.

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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