Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
#7 3 points) Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brune contract specifies that it will receive a flat fee
#7 3 points) Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brune contract specifies that it will receive a flat fee of $150,000 for providing the customized signs, and an additional $10,000 if 30% of Di Antonio's new customers indicate they first learned of Di Antonio because of the signs. Based on historical experience, Brunetti estimates that there is a 90% chance it will achieve the threshold to receive a bonus. Assuming Brunetti uses the most likely value to estimate the variable consideration, calculate the transaction price. NOTE: Because I addressed the most likely approach in the previous problem; THIS IS THE ANSWER TO THIS PART OF THIS QUESTION: Based on the most likely amount, the transaction price is $150,000+ $10,000 = $160,000, because there is a greater chance of receiving the bonus than not receiving it. Question to Answer Here: Assuming Brunetti determines transaction price as the "expected value of the variabl consideration, what would be the appropriate transaction price for this contract
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started