Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six months...
Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, 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 $3000 up to 70%.
How much revenue would Sanjeev recognize in the third month of the contract?
Homework Answers
| In second estimate sanjeev would receive $3,000 with 70% outcome | |||
| Amount to be paid per month | (1000*6)+3000 | ||
| Amount to be paid per month | 6000+3000 | ||
| Amount to be paid per month | 9000 | ||
| Amount to be paid per month | 9000/12 | ||
| Amount to be paid per month | $750 | ||
| Thus, amount of revenue in third month would be $750 | |||
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Sanjeev enters into a contract offering variable consideration.
The contract pays him $1,000/month for six months...
Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six months...
Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, 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 $3000 up to 70%. How much revenue would...
Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months...
Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000 and a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev estimates uncertain consideration using the most likely amount. What is the amount of revenue Sanjeev would recognize for the first month of the contract? A. $0....
Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months...
Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000 and a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev estimates uncertain consideration using the most likely amount. What is the amount of revenue Sanjeev would recognize for the first month of the contract? A. $0....
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Part 1) Record the entry to record revenue each month for the first four months of...
Part 1) Record the entry to record revenue each month for the
first four months of the contract
Part 2) Record the entry at the start of fifth month, to
recognize the charge in estimate associated with the reduced
likelihood that the $24,000 bonus will be received.
Part 3) Record the entry to record revenue each month for the
second four months of the contract.
part 4) Record the entry eight months to record receipt of the
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likelihood that the $24,000 bonus will be received.
Part 3) Record the entry to record revenue each month for the
second four months of the contract.
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$24,000 bonus.
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