The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory Apr. 1 Oct. 1 Purchased Purchased During the year, Parvin sold 3,400 units of inventory at $43 per unit and incurred $15,900 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 $148,800, inventory of $5,700, common stock of $130,000, and retained earnings of $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. c. Determine the cash flow from operating activities under FIFO and LIFO. 300 units 8 $19 2,900 units e $24 800 units e $25 Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the amount of income tax that Parvin would pay using each cost flow method. FIFO LIFO
The following information pertains to the inventory of Parvin Company: Jan. 1 Beginning inventory Apr. 1 Oct. 1 Purchased Purchased During the year, Parvin sold 3,400 units of inventory at $43 per unit and incurred $15,900 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 $148,800, inventory of $5,700, common stock of $130,000, and retained earnings of $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. c. Determine the cash flow from operating activities under FIFO and LIFO. 300 units 8 $19 2,900 units e $24 800 units e $25 Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the amount of income tax that Parvin would pay using each cost flow method. FIFO LIFO
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 2P
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