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Bonita Corp. enters into a contract with a customer to build an apartment building for $991,300. The customer hopes to rent apartments at the beginning
Bonita Corp. enters into a contract with a customer to build an apartment building for $991,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $147,900 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $49,300 each week that completion is delayed. Bonita commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Probability 70 % Completed by August 1, 2021 August 8, 2021 August 15, 2021 After August 15, 2021 20 6 4 Determine the transaction price for this contract. Transaction Price $
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