c. IT Inc. enters into a contract with Smit Co. to install a new technology system. IT Inc. will receive a bonus of $10,000 (in addition to a fixed fee of $100,000) if the installation is completed before year-end. The bonus decreases by $2,000 per week after year-end. IT Inc. estimates that there is a 70% probability that the contract will be completed by the agreed-upon completion date, a 20% probability that it will be completed one week after year-end, and a 10% probability that it will be completed two weeks after year-end.

Fixed consideration: $Answer

Variable consideration: $Answer

d. Sisko Inc. enters into a contract with Davi Co. to install a new technology system. Sisko Inc. will receive a bonus of $10,000 (in addition to a fixed fee of $100,000) if the installation is completed before year-end. The bonus decreases by $2,000 per week after year-end. Based on Siskos history of meeting deadlines, Sisko estimates that the most likely amount of the bonus to be received is $10,000.

Fixed consideration: $Answer

Variable consideration: $Answer