Sonny Beam established Solar Supply Corporation earlier in the current year. To obtain resources, he contributed $5,000 of his savings to the company, had the company borrow $8,000 from his mother, sold shares of company stock to friends totaling $10,000, and obtained a $25,000 bank loan. The company is obligated to buy out all investors and repay the two loans within 12 months of the business becoming profitable. Sonny located space in a nearby business park and leased it for monthly rent of $1,000 plus 1% of his company’s sales. Several competing manufacturers tried to attract him as a distributor of their products. He signed an exclusive agreement with one that offered its products at 52% off their normal sales prices with 30-day free credit. Sonny hired a sales manager at a salary of $3,000 per month and promised her a profit-sharing plan payable each December 31. Sonny’s credit policy is that commercial customers receive 60-day free credit and that retail customers must pay by cash or credit card. All goods carry the manufacturer’s warranty and Sonny’s secondary warranty of “satisfaction guaranteed or your money back.” Because the company is a corporation, it will pay corporate income tax to the city, state, and federal governments. In addition, the state will levy a merchandise tax each July 1.

Required
A. Identify the primary exchanges and contracts between the company and those that interact with it.
B. Which of the parties have taken on risk? For each such party, describe that risk.
C. Which contracts will require the parties to rely on accounting information to verify performance according to the contract? Be specific.