You are a CPA and have been appointed as the independent arbitrator by Deb and Mary. The parties have asked you to decide on the accounting for the unresolved issues. The agreement between Deb and Mary requires that your interpretations be made in accordance with ASPE, but that you should also consider fairness in making your conclusions. The parties would like full explanations of your recommendations and the reasoning behind them.

The outstanding issues along with DHLs reported net income for the last two years are provided below:

1. DCLs net income for the years ended September 30, 2019 and 2018 respectively was $275,000 and $160,000.
2. In May 2019 25 people at a wedding catered by DHL became ill, allegedly because some of the food prepared by DHL had become contaminated. While everyone recovered within a few days the groom was livid and told Deb that she ruined his wedding. The groom asked Deb for $15,000, which is a full refund of the amount paid for the catering at the wedding.
3. A large corporate function scheduled for September 18, 2019 had to be cancelled on short notice by the customer. The customer asked whether the event could be rescheduled for October 2, 2019. DCLs banquet hall was available on October 2 and DHL was happy to reschedule. On August 31, the customer paid $45,000 (75 percent of the agreed price) as the original contract stipulated. DCL recognized the amount received in August as revenue in its 2019 fiscal year. The customer paid the remaining $15,000 owing on October 4, 2019. Costs incurred for meals, entertainment, and labour were $44,000 and these were expensed at the time of the event.
4. Each year during the last week of September, DHL has a major program of maintenance on its kitchen and banquet hall. Late September is usually a quiet time and Deb has found it more efficient to do all the maintenance work at once. The banquet hall is closed for several days and the kitchen can have only limited operations. This year, the maintenance program was delayed into October because of the corporate function held on October 2. The cost of the maintenance program in 2019 was $18,000. In 2018, the maintenance program was carried out and completed in late September.
5. DHL is in the process of developing a line of packaged foods for sale in grocery stores. The idea is to allow customers to bring the taste and convenience of a high-quality catered meal to their homes. Over the last 18 months, DHL has invested $55,000 in the development of the product. Deb is confident that the product will be successfully and profitably brought to grocery stores but she realizes there are significant development, production, and marketing obstacles that will have to be overcome before that occurs. The $55,000 is reported on the balance sheet as a product development cost on September 30, 2019.

Mary has asked you to prepare a report discussing issues pertaining to the purchase of DHL.