Smith and Quarter Ltd. experienced the following events during the first quarter of 2006:

1. The annual sales catalogue was developed and provided on-line, at a cost of

$1,000,000.

2. Programming and consulting fees were incurred for annual updates of the Internet site, at a cost of $500,000.

3. Owing to a strike at the principal supplier's factory, Smith and Quarter’s inventory fell to the lowest level in 14 years. Smith and Quarter uses the LIFO method for financial reporting.

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 2006 are estimated at $400,000.

5. Smith and Quarter uses the declining-balance method for depreciation. The total depreciation for 2006 on assets held at the start of the year will be $1,600,000.

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