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Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's contract specifies that it will receive a flat fee of $150,000 for
Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's 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. Required: Assuming Brunetti uses the most likely value to estimate the variable consideration, calculate the transaction price. Transaction price $ 159,000 Help Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's 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. Required: Assuming Brunetti determines transaction price as the "expected value of the variable consideration, what would be the appropriate transaction price for this contract? Expected contract price 160,000
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