The following information pertains to the inventory of Parvin Company for Year $3$:

January $1$ Beginning inventory $300$ units @ $$17$

April $1$ Purchased $2,500$ units @ $$22$

October $1$ Purchased $1,000$ units @ $$23$

During Year $3,$ Parvin sold $3,230$ units of inventory at $$42$ per unit and incurred $$18,300$ 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 $$209,900,$ inventory of $$5,100,$ common stock of $$192,000,$ and retained earnings of $$23,000.$ c$.$ Determine the cash flow from operating activities under FIFO and LIFO.

Note: Round intermediate calculations and final answers to the nearest whole dollar amount. Cash outflows should be indicated with minus sign.

Answer rating: 100% (QA)

To calculate the cash flow from operating activities under LIFO we will use the COGS and ending inve... View the full answer