For each of the accounting issues, describe the effects of your recommended accounting treatments on the company's financial statements for the current and subsequent periods. Describe any footnote disclosure requirements associated with your recommendations. You are encouraged to present the outline of any journal entries that are relevant for the proposed recommendations.

Accounting issue:

1.Is Pinkman a principal or agent in the Contract to provide Lab Administration to Heisenberg?

2.Should Pinkman recognize revenue on a gross or net basis?

Recommandations:

1.As a result, these clauses show that Pinkman is working in the capacity of an agent, offering Heisenbergthe principala range of services. Instead of immediately delivering the promised commodity or service, Pinkman's principal duty is to use its Lab Administration services to make it easier for clients to get Heisenberg's Research Programs. As a result, Pinkman serves as an agent and gets paid for arranging the transaction between Heisenberg and its clients.

2.Pinkman should recognize its revenue on a net basis