Question
Cullumber Construction enters into a contract with a customer to build a warehouse for $840000 on March 30, 2021 with a performance bonus of
Cullumber Construction enters into a contract with a customer to build a warehouse for $840000 on March 30, 2021 with a performance bonus of $50000 if the building is completed by July 31, 2021. The bonus is reduced by $10000 each week that completion is delayed. Cullumber commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by Probability July 31, 2021 65% August 7, 2021 25% August 14, 2021 5% August 21, 2021 5% The transaction price for this transaction is $840000 $591000 $885000 O $581000
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