Labels Ltd. experienced the following events during the first quarter of 20X3:

1. The annual sales catalogue was developed and provided online, at a cost of $2,500,000.

2. Programming and consulting fees were incurred for annual updates of the internet site, at a cost of $1,250,000.

3. Payroll taxes for various government programs were paid as follows: Q1–$650,000; Q2 –$600,000; Q3–$150,000; Q4–$100,000. Total salaries and wages were paid evenly over the year and amounted to $30,000,000.

4. A notice of assessed value for property taxes was received. The tax assessment will be received and be due in the second quarter. Taxes for 20X3 are estimated at $1,400,000.

5. Labels uses the declining-balance method for depreciation. The total depreciation for 20X3 on assets held at the start of the year will be $4,400,000.

6. The company’s top management receives annual bonuses based on 10% of annual net income after taxes.

Required
For each event reported above, indicate what impact it would have on the first-quarter interim report under each approach to interim statements:

a. the integral, or part-of-year, approach;

b. the discrete, or separate-period, approach.