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 $65,000 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 Emmet estimates variable consideration as the most likely amount. How much revenue should Emmet recognize on this contract in 2024? Multiple Choice $36,250 $33,963 $65,000 $32.500
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 $65,000 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 Emmet estimates variable consideration as the most likely amount. How much revenue should Emmet recognize on this contract in 2024? Multiple Choice $36,250 $33,963 $65,000 $32.500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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 $65,000 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 Emmet estimates variable consideration as the most likely amount. How much revenue should Emmet recognize on this contract in 2024?
Multiple Choice
$36,250
$33,963
$65,000
$32.500
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