Pharroah's agency sells an insurance policy offered by capital insurance company for a commission of $109 on jan2 ,2020. In addition, Pharoah will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Pharoah does not have any remaining performance obligations. Based on Pharoah's significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years. It has no evidence to suggest that previous policyholder behavior will change.

Instructions

Determine the transaction price of the arrangement of Pharoah , assuming 95 policies are sold . 

Determine the revenue that Pharoah will recognise in 2020