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(Z) Corp. is evaluating a contract to determine proper revenue recognition. The contract is for construction of (6) aircrafts for a total price of 56.000.000.

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(Z) Corp. is evaluating a contract to determine proper revenue recognition. The contract is for construction of (6) aircrafts for a total price of 56.000.000. The customer needs the aircrafts in its showrooms by April 1, 2019. for the aircrafts purchase season, the customer will provide a bonus payment of 5200,000 if all narcrafts are delivered by the April 1 deadline The bonus is reduced by 550,000 each week that the aircrafts are delivered after the deadline until no bonus is paid if the boats are delivered after April 22, 2019. (Z) Corp frequently includes such bonus terms in it contracts and thus has good historical data for estimating the probabilities of completion at different dates. It estimates an equal probability for each full delivery outcome According to the above information's answer the following question: 1. The transaction price of this transaction using the expected value method equals a 6,000,000 b.6.200.000 c 6.100.000 0.6.050.000 2. The total expected bonus tising the expected value method equals 10 b.200,000 50.000 d. 100.000 3. Arume that 2) Corp has limited expenence with a construction project on the same scale as the (6) aircrats. How should (Z) Corp determine the transaction price for this contract hem the 3. Assume that (Z) Corp has limited experience with a construction project on the same scale as the (6) aircrafts. How should (2) Corp determine the transaction price for this contract A(Z) Corp should not recognize revenue at this time because it does not have experience with similar contracts and is not able to estimate the cumulative amount of revenue (contract price) 6.6.000.000 C 6.100,000 d: 6,200.000

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