Sports Performance Increased (BPI) Ltd. is a relatively new company that created various sports apps designed for athletes. These apps can be downloaded onto a mobile device and assist users in determining where they can improve their game, whether it is soccer, baseball, hockey, running, or swimming. Users are able to download any desired sports application onto a mobile device for a fee that normally ranges from $7.99 to $9.99. SPI charges a $3.99 monthly fee to continue to provide support, as well as updates and improvements to the app.    

The company was established by Jack and William, one year after they completed a degree in business and statistical math. Jack and William are excellent programmers, and have been playing various sports and analyzing sports statistics since they were children. After designing a mobile app for an undergraduate course assignment, the two friends decided to start up SPI. The company has been well received by the market, and the apps have been downloaded by over 5 million users across the globe. 

The company experienced significant growth in its first five years of operations, and decided to go public. Two analysts are currently following SPI's shares, which are trading at $13, and are preparing their first recommendation. SPI is scheduled to release its financial results in two weeks during a conference call. Based on the results released by industry competitors, analysts are expecting the company to report revenue of $4.2 million and earnings of $1.5 million in the current year.

You are the senior manager with Clark, Walker and Wilson, LLP, the auditors of SPI. Recently, you met with Jack and William to discuss the following transactions that took place during the year

 

What are the constraints

Answer rating: 100% (QA)

The constraints in this scenario would include ensuring compliance with accounting standards regulat... View the full answer