Please provide answer in text form only (without image) On January 1st, Bob the Builder entered into a contract of a two-month durationto build a barn. Bob is guaranteed to receive a base fee of $7,000 for his servicesin addition to a bonus depending on when the project is completed. Bob can earnan additional 30% of the base fee if the project finished 2 weeks early and anadditional 10% if the project finished a week early. The probability of finishing 2weeks early is 70% and the probability of finishing a week early is 20%.Required: How much total revenue is estimated if the expected value approach isused?

Revenue from a contract with the customer consists of fixed consideration and/or variable…

Answered: Required: How much total revenue is…

Business

Accounting

Required: How much total revenue is estimated if the expected value approach is used?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter12: Tax Credits And Payments

Section: Chapter Questions

Problem 25P

See similar textbooks

Similar questions

Jeff Heun, president of Pina Always, agrees to construct a concrete cart path at Dakota Golf Club. Pina Always enters into a contract with Dakota to construct the path for $184,000. In addition, as part of the contract, a performance bonus of $36,400 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $9,100 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. Determine the transaction price that Pina…
Sanjeev enters into a contract that pays him $1,000 each month for six months of continuous consulting services. In addition, there is a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev used the most likely amount to determine transaction price. After Sanjeev has recognized revenue for two months of the contract, he changes his assessment of the chance the contract will pay him $3,000 up to 70%. How much revenue would Sanjeev recognize in the third month of the contract? $2,500 O $1.500 $1,850 O $1,600
Ms. Demeanor had a new POS (point-of-sale) installed in her office. The balance owing on the contract is $23,500 which includes equipment and installation fees. The contract permits individual payments on the account whenever possible, but the final balance must be paid two years (24 months) from now. Starting today, interest will accumulate on the balance at 3.25% compounded monthly. Ms. Demeanor will make a payment of $5200 6 months from now and $6300 20 months from now. What is the final balance owing on the account in two years (24 months from now)? Practice drawing a timeline in your own notes.
Jeff Heun, president of Concrete Always, agrees to construct a concrete cart path at Dakota Golf Club. Concrete Always enters into a contract with Dakota to construct the path for $200,000. In addition, as part of the contract, a performance bonus of $40,000 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,000 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. Instructions a. Determine the transaction…
Nair Corp. enters into a contract with a customer to build an apartment building for $1,000,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $150,000 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $50,000 each week that completion is delayed. Nair commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability August 1, 2021 70% August 8, 2021 20 August 15, 2021 5 After August 15, 2021 5 Determine the transaction price for this contract.
Whispering Corp. enters into a contract with a customer to build an apartment building for $979,400. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $144,300 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $48,100 each week that completion is delayed. Whispering commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability August 1, 2021 70 % August 8, 2021 20 August 15, 2021 5 After August 15, 2021 5 Determine the transaction price for this contract. Transaction Price $enter the transaction price for this contract
Jeff Heun, president of Wildhorse Always, agrees to construct a concrete cart path at Dakota Golf Club. Wildhorse Always enters into a contract with Dakota to construct the path for $233,000. In addition, as part of the contract, a performance bonus of $42,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. a.) Determine the transaction…
Robinson Corp. enters into a contract with a customer to build an apartment building for $990,500. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $147,300 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $49,100 each week that completion is delayed. Robinson commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2026 August 8, 2026 August 15, 2026 After August 15, 2026 Transaction price $ Probability Transaction price 70 % $ 20 (a) Determine the transaction price for the contract, assuming Robinson is only able to estimate whether the building can be completed by August 1, 2026, or not (Robinson estimates that there is a 70% chance that the building will be completed by August 1, 2026). 5 5 (b) Determine the transaction price for the contract, assuming Robinson has limited…
Anderson Corp. enters into a contract with a customer to build an apartment building for $995,600. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $145,500 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $48,500 each week that completion is delayed. Anderson commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability August 1, 2026 70 % August 8, 2026 20 August 15, 2026 5 After August 15, 2026 5 Determine the transaction price for this contract. Transaction price
William Corp. enters into a contract with a customer to build an apartment building for $1,056,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $136,200 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $45,400 each week that completion is delayed. William commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2026 August 8, 2026 August 15, 2026 After August 15, 2026 Transaction price $ Probability 70 % Transaction price $ 20 (a) Determine the transaction price for the contract, assuming William is only able to estimate whether the building can be completed by August 1, 2026, or not (William estimates that there is a 70% chance that the building will be completed by August 1, 2026). 5 5 115770 (b) Determine the transaction price for the contract, assuming William has…
William Corp. enters into a contract with a customer to build an apartment building for $1,056,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $136,200 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $45,400 each week that completion is delayed. William commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2026 August 8, 2026 August 15, 2026 After August 15, 2026 Transaction price $ Probability LA 70 % 20 Determine the transaction price for this contract. 5 5 SUPPORT
Whispering Corp. enters into a contract with a customer to build an apartment building for $1,300,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $195,000 to be paid if the building is ready for rental beginning August 1, 2026. The bonus is reduced by $65,000 each week that completion is delayed. Whispering commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes. August 1, 2026 August 8, 2026 August 15, 2026 After August 15, 2026 Transaction price LA 70% $ 20 Determine the transaction price for this contract. 5 5