Chapter 5, Problem 5.9E

Requirement – 1

To determine

Transaction price:

Transaction price refers to the price that is paid at the time of delivery or after delivery of goods and/or services. Specific situations affecting the transaction price are as follows:

• Variable amount of consideration and the restriction on its recognition.
• Rights for sales return
• Whether the seller is acting as a principle or an agent
• Time value of money
• Payments by the seller to the customer

Variable consideration:

Variable consideration refers to the uncertain transaction price that depends upon the outcome of future events.

To determine: The transaction price, and assume T uses the expected value as its estimate of variable consideration.

Requirement – 2

To determine

The transaction price, and assume T uses the most likely value as its estimate of variable consideration. .

Requirement – 3

To determine

The transaction price, and assume T uses the expected value as its estimate of variable consideration in uncertain event.