Paul's friend Gabby had an idea of creating a photography service that went to school functions, such as football games, pep rallies and dances, to take candid pictures. The pictures would be available to
purchase the following week. She needed $300 to buy additional equipment and start an advertising
campaign, so she asked Paul for a loan. She promised to pay him back the $300 and give him 25
percent of her profits from the first semester. Gabby sold a few pictures the first week of school but quit
going to events to take pictures. She can't repay the loan and there are no profits. Paul lost $300.
How would you describe the financial risk Paul faces?

Costco wholesale corporation operates membership warehouses selling food, appliances, consumer electronics, apparel and other household goods at 471 locations across the u.s. as well as in canada, mexico and puerto rico. as of its fiscal year-end 2005, costco had approximately 21.2 million members. selected fiscal-year information from the company's balance sheets follows. ($ millions). selected balance sheet data 2005 2004 merchandise inventories $4,015 $3,644 deferred membership income (liability) 501 454 (a) during fiscal 2005, costco collected $1,120 cash for membership fees. use the financial statement effectstemplate to record the cash collected for membership fees. (b) in 2005, costco recorded $46,347 million in merchandise costs (that is, cost of goods sold). record thistransaction in the financial statement effects template. (c) determine the value of merchandise that costco purchased during fiscal-year 2005. use the financial statementeffects template to record these merchandise purchases. assume all of costco's purchases are on credit.