Company agrees to pay Client the following incremental volume incentive based on annual Caf and Catering Sales at all Locations under this Agreement: Annual Combined Net Caf & Catering Sales Volume Incentive $8,000,000-$9,999,999 = 4.00% $10,000,000-$11,999,999 = 4.25% $12,000,000-$14,999,999 = 4.50% $15,000,000-$16,999,999 = 5.00% $17,000,000+ = 5.50%

Please note - Compass records liabilities throughout the year		P&L Reporting From Period 1, 2015 To Period 12, 2015							Profit Center: Client C
Period	1, 2015	2, 2015	3, 2015	4, 2015	5, 2015	6, 2015	7, 2015	8, 2015	9, 2015	10, 2015	11, 2015	12, 2015	TOTAL
TOTAL SALES	1,732,040	1,611,670	1,858,902	1,619,261	1,842,207	1,802,552	2,207,373	2,024,065	1,881,086	2,047,443	1,530,778	1,845,760	22,003,137
NET PRODUCT COST	1,187,541	904,283	953,846	891,832	970,109	1,009,812	1,096,504	1,008,839	982,144	1,069,752	890,088	965,530	11,930,280
TOTAL PERSONNEL COST	1,133,232	959,757	982,787	1,029,647	963,413	1,045,159	1,123,650	1,001,210	956,945	1,075,766	908,111	922,431	12,102,108
TOTAL OTHER COSTS	297,593	246,569	270,103	237,250	250,486	223,110	291,457	284,196	300,564	304,549	249,987	268,456	3,224,320
PROFIT/(LOSS)	(886,326)	(498,939)	(347,834)	(539,468)	(341,801)	(475,529)	(304,238)	(270,180)	(358,567)	(402,624)	(517,408)	(310,657)	(5,253,571)
YTD PROFIT/(LOSS)	(886,326)	(1,385,265)	(1,733,099)	(2,272,567)	(2,614,368)	(3,089,897)	(3,394,135)	(3,664,315)	(4,022,882)	(4,425,506)	(4,942,914)	(5,253,571)

Question 1:

Would Compass have a liability to the client at the end of period 4, 2015?

Please show your calculation and provide any entries necessary to properly state the financials in that period of time.