Sanjeev enters into a contract offering variable consideration. The contract pays him $1,400/month for six months of continuous consulting services. In addition, there is a 80% chance the contract will pay an additional $4,800 and a 20% chance the contract will pay an additional $1,200, depending on the outcome of the consulting contract. Sanjeev concludes that this contract qualifies for revenu recognition over time. Assume Sanjeev estimates variable consideration as the expected value. What is che amount of revenue Sanjeev would recognize for the first month of the contract?

Sanjeev enters into a contract offering variable consideration. The contract pays him $1,400/month for six months of continuous consulting services. In addition, there is a 80% chance the contract will pay an additional $4,800 and a 20% chance the contract will pay an additional $1,200, depending on the outcome of the consulting contract. Sanjeev concludes that this contract qualifies for revenu recognition over time. Assume Sanjeev estimates variable consideration as the expected value. What is che amount of revenue Sanjeev would recognize for the first month of the contract?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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