Question

Chapter 5 Homework Required information Exercise 5-6 Income tax effect of shifting from FIFO to LIFO LO 5-1 (The following information applies to the questions displayed below.) Part 2 of 3 The following information pertains to the inventory of Parvin Company for Year 3: 11.11 points Jan. 1 Apr. 1 Oct. 1 Beginning inventory Purchased Purchased 400 units @ $17 3,000 units @ $22 900 units @ $23 eBook During Year 3, Parvin sold 3,655 units of inventory at $41 per unit and incurred $19,000 of operating expenses. Parvin y 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 $54,200, inventory of $6,800, common stock of $36,000, and retained earnings of $25,000. Print References Exercise 5-6 Part b b. Determine the amount of income tax that Parvin would pay using each cost flow method. FIFO LIFO Income tax