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Problem 2: (3 points each, 9 points total) Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's contract specifies that it

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Problem 2: (3 points each, 9 points total) Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's contract specifies that it will receive a flat fee of $15.000.for providing the customized signs, and an additional $1,000 if 30 % of Di Antonio's new customers indicate they first learned of Di Antonio because of the signs. Based on historical experience, Brunetti estimates that there is a 90% chance it will achieve the threshold to receive a bonus. A. Assuming Brunetti uses the most likely value to estimate the variable consideration, calculate the transaction price. Work: Answer: B. Assuming Brunetti determines transaction price as the "expected value" of the variable consideration, what would be the appropriate transaction price for this contract? Answer: Work: C. Assume Brunetti uses the "expected value" approach, but is very uncertain of that estimate due to a lack of experience with similar arrangements. What would be the appropriate transaction price? Work: Answer: Problem 2: (3 points each, 9 points total) Brunetti Co. designed and installed customized signs for Di Antonio CPA, Inc. Brunetti's contract specifies that it will receive a flat fee of $15.000.for providing the customized signs, and an additional $1,000 if 30 % of Di Antonio's new customers indicate they first learned of Di Antonio because of the signs. Based on historical experience, Brunetti estimates that there is a 90% chance it will achieve the threshold to receive a bonus. A. Assuming Brunetti uses the most likely value to estimate the variable consideration, calculate the transaction price. Work: Answer: B. Assuming Brunetti determines transaction price as the "expected value" of the variable consideration, what would be the appropriate transaction price for this contract? Answer: Work: C. Assume Brunetti uses the "expected value" approach, but is very uncertain of that estimate due to a lack of experience with similar arrangements. What would be the appropriate transaction price? Work

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