$$Prepare a case response including an introduction, for each issue $-$ issue identification, quantitative and qualitative analysis, alternatives $($if applicable$),$ recommendations. Use Excel for quantitative analysis and Word for narrative.

Markham IT Solutions $$ Markham IT Solutions $($MITS$)$ is a fast growing, medium$-$sized business that primarily provides integrated server solutions that manage the storage, organization, and retrieval of information. MITS provides IT solutions by offering both server hardware and database management software. MITS's CEO, CFO, and COO are compensated based on a $10\%$ bonus of net income if revenues exceed $$4$ million. The net income and revenue measures are based on the financial statements prepared in accordance with ASPE. The Board of Directors implemented such a bonus structure in order to help align the goals of top management and shareholders, and also ensure that executives do not cut discretionary spending in order to reach a net income bonus threshold. If ASPE does not specifically address an accounting issue then the company looks to IFRS for guidance. MITS's top management team is excited about the current year's results because the draft financial statements reveal revenues in excess of the $$4$ million threshold and a bonus of $$156,390$ will be payable. The draft financial statements are to be reviewed by the internal audit department, in anticipation of the external auditor's field work next week. You have just been hired as an internal auditor, reporting directly to the internal audit manager. The manager has called you into her office to discuss your first engagement: Manager: "Welcome to the team. We are very happy that you decided to accept our offer of employment:$\text{'}$ You: "Thank you. I am very excited to be here, and look forward to being a part of the team' Manager: "Excellent. Well, your first engagement is a very important task. I would like you to review our draft income statement prior to the external audit next week. Specifically, I would like to you focus on the revenues, comment on the gross margin ratio and advise the company if they should finance expansion using bonds or by selling shares. Please prepare a report that outlines any concerns that you have, and addresses any accounting issues:$\text{'}$ You: "Okay, sounds interesting. How can I start?" Manager: "Well, here is a copy of the draft income statement $($Exhibit I$).$ In addition, I have prepared the following notes of the current year's operations for your review $($Exhibit II$).$ This should be enough to get you started on your report. we can meet again once you have prepared your report:$\text{'}$ You: "Sounds good. I'll get started right away." $$ Required Prepare the report.