Nash’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $116 on January 2, 2020. In addition, Nash will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Nash does not have any remaining performance obligations. Based on Nash’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years, which results in an expected policy life of 5.5 years. It has no evidence to suggest that previous policyholder behavior will change. Determine the transaction price of the arrangement for Nash, assuming 75 policies are sold. (Round answer to 0 decimal places, e.g. 5,125.) Transaction price $ 12,075 Determine the revenue that Nash will recognize in 2020. (Round answer to 0 decimal places, e.g. 5,125.) Revenue $
Nash’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $116 on January 2, 2020. In addition, Nash will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Nash does not have any remaining performance obligations. Based on Nash’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years, which results in an expected policy life of 5.5 years. It has no evidence to suggest that previous policyholder behavior will change.
Determine the transaction price of the arrangement for Nash, assuming 75 policies are sold. (Round answer to 0 decimal places, e.g. 5,125.)
| Transaction price | $ 12,075 |
Determine the revenue that Nash will recognize in 2020. (Round answer to 0 decimal places, e.g. 5,125.)
| Revenue | $ |
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