Walt Disney Company committed to a contract with variable consideration. The customer agreed to pay Walt Disney Company $1,300 per month for six months of training services. In addition, there is a 60% chance the contract will pay an additional $2,000 (one-time bonus) and a 40% chance the contract will pay an additional $3,000 (one-time bonus), depending on the outcome of the training period. Walt Disney Company concludes that this contract qualifies for revenue recognition over time. Assume Walt Disney Company estimates variable consideration as the most likely amount. What is the amount of revenue Walt Disney Company would recognize for the first month of the contract?

Multiple Choice

• $1,633

• $1,820

• $1,200

• $1,300