Current Attempt in Progress Pharoah Construction enters into a contract with a customer to build a warehouse for $959000 on March 30, 2026 with a performance bonus of $49000 if the building is completed by July 31, 2026. The bonus is reduced by $8500 each week that completion is delayed. Pharoah commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:

Current Attempt in Progress Pharoah Construction enters into a contract with a customer to build a warehouse for $959000 on March 30, 2026 with a performance bonus of $49000 if the building is completed by July 31, 2026. The bonus is reduced by $8500 each week that completion is delayed. Pharoah commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes:

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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Current Attempt in Progress $103200 Marigold Company enters into a contract with a customer to build a warehouse for $400700, with a performance bonus of that will be paid based on the timing of completion. The amount of the performance bonus decreases by 20% per week for every week beyond the agreed-upon completion date. The contract requirements are similar to contracts that Marigold has performed previously and management believes that such experience is predictive for this contract. Management estimates that there is a 50% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed 1 week late, and a 20% probability that it will be completed 2 weeks late. What is the total transaction price for this revenue arrangement? O $462620 O $483260 O $489452 $503900
estion 9 On June 1, 2021, Emmet Property Management entered into a 2-year contract to ovorsoo leasing and maintenance for an apartment building. The contract starts on July 1, 2021. Under the terms of the contract, Emmet will be paid a fixed fee of $50,000 per year and will receive an additional 15% of the fixed fee at the end of each year if the building occupancy exceeds a threshold. 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 holy amount. How much revenue should Emmet recognize on this contract in 2021? Oa$28,750 Ob $50,000 O $26,125 Od $25,000
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