Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. The following information pertains to the inventory of Parvin Company: Apr. 1 Purthased Inventory2,500 units $29 Jan. 1Beginning Apr. 1 Purchased Oct. 1 Purchased 1,100 units e $26 During 2018, Parvin sold 3,485 units of inventory at $42 per unit and incurred $18,500 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 $74,000, inventory of $10,000, common stock of $59,000, and retained earnings of $25,000. a. Prepare income statements using FIFO and LIFO. (Round intermediate calculations and final answers to the nearest whole dollar amount.)

Explanation / Answer

income statement

(2500*25)+(1100*26)

=91100

FIFO LIFO sales 3485 *42 = 146370 146370 less: cost of goods sold beginning inventory $10000 10000 add: purchases

(2500*25)+(1100*26)

=91100

91100 101100 101100 less : closing inventory 615*26 =15990 85110 (115*25) +(500*20) =12875 88225 Gross profit 231480 234595 less: operating expenses 18500 18500 income before tax $212980 $216095 less: income tax @30% 63894 64829 Net income $149086 $151266

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.