Required information

Exercise $5-6$A $($Algo$)$ Income tax effect of shifting from FIFO to LIFO LO $5-1$

$[$The following information applies to the questions displayed below.$]$

The following information pertains to the inventory of Parvin Company during Year $2.$

During, Year $2,$ Parvin sold $3,600$ units of inventory at $$95$ per unit and incurred $$50,000$ 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 $$92,000,$ inventory of $$13,950,$ common stock of $$67,000,$

and retained earnings of $$38,950.$