68.Award: 10.00 pointsBig Homes Corporation is an accrual method calendar year taxpayer that manufactures and sellsmodular homes. This year for the first time Big Homes was forced to offer a rebate on the purchaseof new homes. At year-end, Big Homes had paid $12,000 in rebates and was liable for an additional$7,500 in rebates to buyers. What amount of the rebates, if any, can Big Homes deduct this year?$12,000 because rebates are payment liabilities.$19,500 because Big Homes is an accrual method taxpayer.$19,500 if this amount is not material, Big Homes expects to continue the practice ofoffering rebates in future years, and Big Homes expects to pay the accrued rebates beforefiling their tax return for this year.$12,000 because the $7,500 liability is not fixed and determinable.Big Homes is not entitled to a deduction because rebates are against public policy.This is the definition of a recurring item - not material in amount (or better matching), expected to
