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puice and pay of the loan as it s paid by the company for the minerals. How should this transaction be reported? CA8-4 (Accounting Treatment of Purchase Discounts) Shawnee Corp., a household appliances dealer purchase its in from various suppliers, Shawnee has consistently stated its inventories at FIFO cost. Instructions Shawnee is considering alternate methods of accounting for the cash discounts it takes when paying its suppliers promptly. From a theoretical standpoint, discuss the acceptability of each of the following methods. (a) Financial income when payments are made. (b) Reduction of cost of goods sold for the period when payments are made. (c) Direct reduction of purchase cost