Question
Riverbed Corp. enters into a contract with a customer to build an apartment building for $979,400. The customer hopes to rent apartments at the beginning
Riverbed Corp. enters into a contract with a customer to build an apartment building for $979,400. The customer hopes to rent apartments at the beginning of the school year and provides a performance bonus of $144,300 to be paid if the building is ready for rental beginning August 1, 2021. The bonus is reduced by $48,100 each week that completion is delayed. Riverbed 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 Probability 70 % 20 August 15, 2021 5 After August 15, 2021 5 Determine the transaction price for this contract. Transaction Price $
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