1. Jeff Heun, president of Nash Always, agrees to construct a concrete cart path at Dakota Golf Club. Nash Always enters into a contract with Dakota to construct the path for $238,000. In addition, as part of the contract, a performance bonus of $34,000 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $8,500 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 25% probability that he will be 1 week late, and a 25% probability that he will be 2 weeks late.

2. Bill Amends, owner of Marigold Estate Inc., buys and sells commercial properties. Recently, he sold land for $3,270,000 to the Blackhawk Group, a developer that plans to build a new shopping mall. In addition to the $3,270,000 sales price, Blackhawk Group agrees to pay Marigold Estate Inc. 1% of the retail sales of the mall for 10 years. Blackhawk estimates that retail sales in a typical mall project is $950,000 a year. Given the substantial increase in online sales that are occurring in the retail market, Bill had originally indicated that he would prefer a higher price for the land instead of the 1% future sales-based arrangement and suggested a price of $3,508,000. However, Blackhawk would not agree to those terms. What is the transaction price for the land and related future sales-based payment that Marigold Estate Inc. should record?