MEDLink System Inc. $($MEDLink$)$ is a privately held company specializing in customized medical software to manage patient records for the medical offices, medical laboratories and hospitals across Canada. MEDLink users are healthcare administrators and professionals $($lab technicians, nurses and doctors$)$ across Canada. The company has been operating from its headquarters in the Lower Mainland of BC since Jan $1,2018.$ The company$$s fiscal year end is December $31.$ For the first time since its inception, an external auditor had been appointed to conduct an audit prior to issuing the financial statements planned for April $15,2022.$ Revenue The Company$$s revenue stems from two sources: i$)$ subscription and support, and ii$)$ professional services. Subscription and support revenues: include subscription fees from customers accessing the Company$$s enterprise cloud computing services, software license renewals, and support revenue from the sales of support and updates beyond the basic subscription fees. Professional service revenues: include professional and advisory services for process mapping, training and product customization. On average, the professional service revenues are $15\%$ of the subscription and support revenues for the first year. Since its inception, MEDLink would deliver $70\%$ of the services in the same period as the same of sale $($i$.$e$.$ same year when the contract is signed$).$ The remaining $30\%$ of the services would be delivered in the following year. Given that all the services would be delivered eventually and that the contract is non$-$cancellable and refundable, the management did not see the need to record revenues at different deliverables. As such, the company has been recording revenue as a single transaction at the point of sale. The price of MEDLink system solution is $$21,600$ per user over a $3-$year period for subscription and support. So if the company signs a contract with a customer on September $15,2021,$ the company would record $$21,600$ on that date. At the end of $3$ years, there is an annual renewal fee for $$3,600$ per user. The amount is automatically and fully recognized at the time when the $2|$ P a g e software license expires. For example, if the software expires on June $30,2021$ for one user at Clinic A$,$ the company will automatically record $$3,600$ on July $1,2022$ assuming that the clinic would renew MEDLink$$s services. The Company usually invoices its customers two months prior to its renewal date, and its payment terms provide customers within $60$ days of invoice. Here are some historical data on the revenue and user count