Fully describe the required accounting treatment for each of the following scenarios:

Based on the annual purchases, our customer will be eligible for a 2% sales discount, but its purchases in this quarter do not qualify for such a discount.

At the beginning of the year, we estimate that we will receive a property tax bill in the amount of $100,000 relating to our corporate headquarters.

During the quarter, we incur costs to develop an advertising campaign that we expect to be aired in the net quarter and benefit the next and following quarters.

We estimate that our salespeople will achieve the annual level of sales needed to realize a 3% bonus commission, but they do not achieve that level of sales during the quarter or year to date.

This is typically a loss quarter for us, but we anticipate taxable income for the year and expect an effective tax rate of 30%.

We have experienced a decline in inventory quantities during the period that results in a LIFO liquidation gain.

We have changed the way we account for an item and don’t know how that change should be reported.

Answer rating: 100% (QA)

Answer A Based on the annual purchases our customer will be eligible for a 2 sales discount but its purchases in this quarter do not qualify for such a discount The accounting treatment for this scena... View the full answer