Blue Corp. enters into a contract with a customer to build an
apartment building for $1,015,200. The customer hopes to rent
apartments at the beginning of the school year and provides a
performance bonus of $159,900 to be paid if the building is ready
for rental beginning August 1, 2018. The bonus is reduced by
$53,300 each week that completion is delayed. Blue commonly
includes these completion bonuses in its contracts and, based on
prior experience, estimates the following completion
outcomes:
Completed by | Probability | ||
August 1, 2018 | 70 | % | |
August 8, 2018 | 20 | ||
August 15, 2018 | 4 | ||
After August 15, 2018 | 6 |
(a) Determine the transaction price for the contract, assuming Blue is only able to estimate whether the building can be completed by August 1, 2018, or not (Blue estimates that there is a 70% chance that the building will be completed by August 1, 2018).
Transaction Price | $ |
b) Determine the transaction price for the
contract, assuming Blue has limited information with which to
develop a reliable estimate of completion by the August 1, 2018,
deadline.
Transaction Price | $ |
Blue Corp. enters into a contract with a customer to build an apartment building for $1,015,200....
Sheridan Corp. enters into a contract with a customer to build an apartment building for $1,039,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $148,200 to be paid if the building is ready for rental beginning August 1,2018.The bonus is reduced by $49,400 each week that completion is delayed. Sheridan commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: August...
uestion 1 Concord Corp, enters into a contract with a customer to build an apartment building for $1,079,000. The customer hopes to rent apartments at the beginning of the school year and provides a erformance bonus of $153,000 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $51,000 each week that completion is delayed. Concord commonly mcludes these completion bonuses in its contracts and, based on prior experience, estimates the...
Pearl Corp. enters into a contract with a customer to build an apartment building for $1,000,800. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $135,600 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $45,200 each week that completion is delayed. Pearl commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion...
Brief Exercise 18-7 Oriole Corp. enters into a contract with a customer to build an apartment building for $1,045,500. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $139,800 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $46,600 each week that completion is delayed. Oriole commonly includes these completion bonuses in its contracts and, based on prior experience, estimates...
Carla Corp. enters into a contract with a customer to build an apartment building for $1,040,800. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $161,700 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $53,900 each week that completion is delayed. Carla commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion...
Teal Corp. enters into a contract with a customer to build an apartment building for $991,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $147,900 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $49,300 each week that completion is delayed. Teal commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion...
How do you calculate the Transaction Price? Ayayai Corp. enters into a contract with a customer to build an apartment building for $930,000. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $151,500 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $50,500 each week that completion is delayed. Ayayai commonly includes these completion bonuses in its contracts and, based...
Waterway Corp.enters into a contract with a customer to build an apartment building for $1,069,900. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $153,300 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $51,100 each week that completion is delayed. Waterway commonly includes these completion bonuses in its contracts and based on prior experience, estimates the following completion outcomes:...
please explain your answer CALCULATOR FULL SCREEN PRINTER VERSION 4BACK NE Brief Exercise 18-6 Windsor Corp. enters into a contract with a customer to build an apartment building for $1,015,200. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $159,900 to be paid if the building is ready for rental beginning August 1, 2018. The bonus is reduced by $53,300 each week that completion is delayed. Windsor commonly includes these...
4. On April 1, Maple Construction enters into a contract with a customer to build a warehouse for $1,000,000 Maple will receive $75,000 performance bonus if the building is completed by September 1. The bonus is reduced by $25,000 each week that completion is delayed. Maple commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by September 1 September 8 September 15 After September 15 Probability 75% 15% 5 %...