On June 1, 2024, Emmet Property Management entered into a 2-year contract to oversee leasing and maintenance for an apartment building. The contract starts on July 1, 2024. Under the terms of the contract, Emmet will be paid a fixed fee of $50,000 per year and will receive an additional 15% of the fixed fee at the end of each year provided that building occupancy exceeds 90%. Emmet estimates a 30% chance it will exceed the occupancy threshold, and concludes the revenue recognition over time is appropriate for this contract. Assume that Emmet accrues revenue each month, and estimates variable consideration as the most likely amount. On November 1, Emmet revises its estimate of the chance the building will exceed the 90% occupancy threshold to a 70% chance. What is the total amount of revenue Emmet should recognize on this contract in November of 2024? Note: Do not round intermediate calculations. Round final answer to whole dollars. Multiple Choice

On June 1, 2024, Emmet Property Management entered into a 2-year contract to oversee leasing and maintenance for an apartment building. The contract starts on July 1, 2024. Under the terms of the contract, Emmet will be paid a fixed fee of $50,000 per year and will receive an additional 15% of the fixed fee at the end of each year provided that building occupancy exceeds 90%. Emmet estimates a 30% chance it will exceed the occupancy threshold, and concludes the revenue recognition over time is appropriate for this contract. Assume that Emmet accrues revenue each month, and estimates variable consideration as the most likely amount. On November 1, Emmet revises its estimate of the chance the building will exceed the 90% occupancy threshold to a 70% chance. What is the total amount of revenue Emmet should recognize on this contract in November of 2024? Note: Do not round intermediate calculations. Round final answer to whole dollars. Multiple Choice

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 10C

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Question

AJ.7

On June 1, 2024, Emmet Property Management entered into a 2-year contract to oversee leasing and maintenance
for an apartment building. The contract starts on July 1, 2024. Under the terms of the contract, Emmet will be paid a
fixed fee of $50,000 per year and will receive an additional 15% of the fixed fee at the end of each year provided that
building occupancy exceeds 90%. Emmet estimates a 30% chance it will exceed the occupancy threshold, and
concludes the revenue recognition over time is appropriate for this contract.
Assume that Emmet accrues revenue each month, and estimates variable consideration as the most likely amount.
On November 1, Emmet revises its estimate of the chance the building will exceed the 90% occupancy threshold to a
70% chance. What is the total amount of revenue Emmet should recognize on this contract in November of 2024?
Note: Do not round intermediate calculations. Round final answer to whole dollars.
Multiple Choice
$3,125
$7,291

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