1. JKL Company enters into a contract with Craven Library to help them streamline their purchasing process. The contract specifies that Craven Library will pay JKL $270,000 in the form of a fixed fee plus an additional $10,000 if the library achieves $200,000 in cost savings. JKL estimates a 55% chance that the library will achieve a $200,000 savings. Assuming JKL estimates that the transaction price is the expected value transaction price. The transaction price is recorded as ________.

a. $270,000 b. $275,500 c. $280,000 d. $264,500

2. Porter Labs is a wholesaler who sells microscopes for use in high schools to retailers. On August 1 Porter contracts with the LMN to sell 1900 microscopes to LMN to be delivered September 1. The contract price is set at $820 each, with a 20% volume discount if sales exceed 2,500 microscopes within the year. The probability of sales of 2,500 microscopes is expected to be 53%. Using the most-likely-amount approach the consideration to be recognized is estimated to be ________.

a. $1,558,000 b. $1,246,400 c. $1,502,000 d. $1,392,852

3. Axelton Enterprises sells annual memberships to its shooting lodge. The memberships cost $899 each. On January 1, Axelton sold 8,200 memberships and received cash. What journal entry should Axelton Enterprises make on January 31st if adjusting entries are completed monthly.

a. Debit Unearned Revenue; Credit Cash b. Debit Sales Revenue; Credit Unearned Revenue c. Debit Unearned Revenue; Credit Sales Revenue d. Debit Cash; Credit Sales Revenue