Determine the monthly transaction price

Assignment Help Accounting Basics
Reference no: EM132890147

Problem - Variable Consideration - Jonas Consulting enters into a contract to provide cost management consulting services over a 1-year period for $10,000 per month. At the end of the contract, Jonas will either give the customer a $24,000 refund or be entitled to an additional $24,000, depending on the level of cost savings. The company believes there is an 80% chance that it will be entitled to an additional $24,000 and a 20% chance it will give a refund of $24,000. In addition, Jonas believes it is probable that a significant reversal of any previously recognized revenue will not occur. The contract performance is determined to be satisfied over time.

Required -

Determine the monthly transaction price that Jonas should use for recording the contract and prepare Jonas's journal entry at the end of the first month of the contract using the most likely amount approach.

What is the objective of determining the transaction price based on the amount of variable consideration?

Reference no: EM132890147

Questions Cloud

What are the implications of using a convenience sample : The most common sampling method is convenience sample. What are implications of using a convenience sample on the way that you interpret and use the findings?
What are the role of talent management in an organization : What are the role of talent management in an organization?
Summary of the type of risk management plan : Summary of the type of risk management plan you selected (new employee, specific audience, community-focused, etc.) and your rationale
Improve selection system to prevent hiring employees : Emerson Bank has experienced several employee thefts and other counterproductive work behaviors in recent years. The CEO has asked you to make a recommendation
Determine the monthly transaction price : Determine the monthly transaction price that Jonas should use for recording the contract and prepare Jonas's journal entry at the end of the first month
What is meant by raci : 1. A project has a 60% chance of a $100,000 profit and a 40 percent of a US $100,000 loss. Calculate the Expected Monetary Value for the project.
How much revenue related to the license is recognized : Assuming Crockett manufactures and delivers the drug to Tubbs evenly over the 5-year period, how much revenue related to the license is recognized in 2019
Discuss any changes made since the article was published : Discuss any changes made since this article was published? In June 2009, President Obama issued a directive on same-sex domestic partner benefits.
How group cohesiveness is developed and sustained : How group cohesiveness is developed and sustained. Use examples from work or your community to illustrate how this was or was not achieved.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd