Required a business letter

Background Bob Lotta worked for many years in the retail industry, primarily as a cashier at Macys. In his spare time, Bob developed a billing and management software package that could be used in a number of different retail applications by different types of stores. He originally called it Lotta Billing Software but when his competitors took to calling it Lotta BS, he changed the name to Complete Billing Software (CBS). Over time, CBS, Inc. went public and became a developer and provider of specialized customer billings and management software and systems. CBSs flagship product, the Tornado System, is a customer billings and management system consisting of integrated hardware (user interfaces and consoles) and related software. CBS has never sold, nor does it offer to sell, the Tornado System without the software since the software is necessary for the Tornado System to function as intended. On February 1, 2020, CBS entered into an arrangement with Food Tank Inc. (Food Tank), a restaurant servicer, to deliver the Tornado System on March 1, 2020 and to provide one year of post-contract customer support (PCS) beginning March 1, 2020. Food Tank paid $12,000 on February 1, 2020, for the Tornado System and the related PCS. The PCS includes telephone support, repair or replacement of defective parts, any available software updates, and any necessary bug fixes for the software. There is no general right of return on the arrangement. The $12,000 sale consists of two separate units of accounting with a combined cost of $14,000 if purchased separately: 1. Customer management system $12,000 (if sold separately) 2. One year of PCS $ 2,000 (if sold separately) CBSs Director of Accounting, Taylor Corning, has approached you with some accounting questions. She never really paid attention during Intermediate Accounting and so revenue recognition rules have always escaped her; however, she is a CPA and the head of finance for an SEC registered, publicly traded company and would expect any correspondence to treat her as such. You are a staff accountant for the local accounting firm that provides ad-hoc services to CBS. ACCTG 390W In Class Writing Assignment Revenue Recognition Required Using the background reading materials, prepare a letter that addresses the following questions from Ms. Corning: 1. Taylor has heard that there are special rules related to recognizing revenue on software. She needs to understand whether those rules apply to Tornado Systems. 2. On the basis of the response to Question 1, discuss the revenue recognition accounting literature that would be applied to each unit of accounting in the February 1, 2020, arrangement. Provide the cumulative revenue recognized and deferred revenue balance related to the Food Tank arrangement as of April 30, 2020 in the following table: Revenue Recognized through 4/30/2020 Revenue Deferred at 4/30/2020 Tornado Systems One Year PCS In addition to the table, be sure and provide journal entries for the initial cash receipt on February 1, 2020 and the revenue recognition through April 30, 2020. This means one journal entry at February 1, 2020 and a second journal entry at April 30, 2020. You may want to prepare the calculations in Excel and then paste them into Word as a table but that is your call. Put both of Taylors questions together into a single letter. Taylors Address: Ms. Taylor Corning Complete Billing Software 1644 Main Street San Diego, Californ