Sweets Agency sells an insurance policy offered by Capital Insurance Company for a commission of $82 on January 2, 2017. In addition, Sweet will receive an additional commission of $8 each year for as long as the policyholder does not cancel the policy. After selling the policy, Sweet does not have any remaining performance obligations. Based on Sweets 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.

Determine the transaction price of the arrangement for Sweet, assuming 110 policies are sold.

Determine the revenue that Sweet will recognize in 2017.