Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thomas Consultants provided Bran Construction with assistance in implementing various cost savings initiatives. Thomas's contract specifies that it will receive a flat fee of $52,000

image text in transcribed
image text in transcribed
Thomas Consultants provided Bran Construction with assistance in implementing various cost savings initiatives. Thomas's contract specifies that it will receive a flat fee of $52,000 and an additional $22,000 if Bran reaches a prespecified target amount of cost savings. Thomas estimates that there is a 30% chance that Bran will achieve the cost-savings target Required: 1. Assuming Thomas uses the expected value as its estimate of variable consideration calculate the transaction price 2 Assuming Thomas uses the most likely value as its estimate of variable consideration calculate the transaction price 3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements Calculate the transaction price. Complete this question by entering your answers in the tabs below. Req Reg 2 and a Assuming Thomas uses the expected value as its estimate of variable consideration, calculate the transaction price Possible Amounts Probabilities Expected Amounts % % Expected contract price at inception specifies that it will receive a flat fee of $52,000 and an additional $22,000 if Bran reaches a prespecified target amount of cost savings. Thomas estimates that there is a 30% chance that Bran will achieve the cost savings target Required: 1. Assuming Thomas uses the expected value as its estimate of variable consideration calculate the transaction price: 2 Assuming Thomas uses the most likely value as its estimate of variable consideration calculate the transaction price. 3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements Calculate the transaction price. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 and 3 2. Assuming Thomas uses the most likely value as its estimate of variable consideration, calculate the transaction price. 3. Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements. Calculate the transaction price. 2 Transaction price 3 Transaction price

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cornerstones of Managerial Accounting

Authors: Mowen, Hansen, Heitger

3rd Edition

324660138, 978-0324660135

More Books

Students also viewed these Accounting questions

Question

is particularly relevant to these questions.)

Answered: 1 week ago