Question
please help me with this , show all computations. Jackson Building Company enters into a contract to install a fence around a parking lot. According
please help me with this , show all computations.
Jackson Building Company enters into a contract to install a fence around a parking lot. According to the contract, Jackson will receive $30,000 for installing the fence plus a bonus of $3,000 if the fence is installed within 5 days. Jackson estimates that it has a 75% chance of earning the $3,000 bonus. Jackson is deciding between using the expected-value approach and most-likely approach. Jackson believes that either method could be justified. If Jackson wants to maximize its reported revenue, which method will it choose?
A. Jackson will choose the expected-value approach the transaction price would be $32,250
B. Jackson will choose the most-likely approach as Jacksons transaction price would be $32,250
C. Jackson will choose the expected-value approach the transaction price would be $33,000
D. Jackson will choose the most-likely approach as Jacksons transaction price would be $33,000
E. Jackson cannot record any bonus revenue as the variable consideration could reverse. Jacksons transaction price is $30,000.
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