Jan. 1 Apr. 1 Oct. 1 Beginning inventory Purchased Purchased 500 units 2,800 units 1,100 units @ $25 $26 During the year, Parvin sold 3,740 units of inventory at $45 per unit and incurred $16,300 of operating expenses. Parvin currentl 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 $73,500, inventory of $10,000, common stock of $59,000, and retained earnings $24,500. 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. uming the cash flow from operating activities under FIFO and LIFO.
Jan. 1 Apr. 1 Oct. 1 Beginning inventory Purchased Purchased 500 units 2,800 units 1,100 units @ $25 $26 During the year, Parvin sold 3,740 units of inventory at $45 per unit and incurred $16,300 of operating expenses. Parvin currentl 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 $73,500, inventory of $10,000, common stock of $59,000, and retained earnings $24,500. 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. uming the cash flow from operating activities under FIFO and LIFO.
Fundamentals of Financial Management (MindTap Course List)
15th Edition
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter4: Analysis Of Financial Statements
Section: Chapter Questions
Problem 24P: Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of...
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