Question: Suppose that Blake Companys total pre-tax difference from a change to FIFO was $100,000 and the company pays a bonus of 5% of its income

Suppose that Blake Company’s total pre-tax difference from a change to FIFO was $100,000 and the company pays a bonus of 5% of its income before income taxes and bonus to employees. If Blake Company pays an additional bonus based on the change in income, would it recognize any expense? If so, when and how much?

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