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Pina Corp.enters into a contract with a customer to build an apartment building for $1,013,300. The customer hopes to rent apartments at the beginning of
Pina Corp.enters into a contract with a customer to build an apartment building for $1,013,300. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $152,100 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $50,700 each week that completion is delayed. Pina commonly includes these completion bonuses in its contracts and, based on prior experience, estimates the following completion outcomes: Completed by August 1, 2021 August 8, 2021 August 15, 2021 After August 15, 2021 Probability 70 % 20 5 5 5 Determine the transaction price for this contract. Transaction Price $ FA
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