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What is the amount of transaction price

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Reference no: EM132952811

Problem 1: Assume that the RSGL anticipates that, in addition to receiving the P1,000,000 million license fee, it will receive a bonus of P2,000,000 in year 1 of the contract and a bonus of P3,000,000 in years 2-4 of the contract based on ReSA Logo's sales. Also assume that the RSGL is convinced that it is probable there will not be a significant reversal of any revenue recognized with respect to the bonus in subsequent periods. At the inception of the contract, what is the amount of transaction price that the RSGL would estimate with respect to this license arrangement?

a. Zero

b. P 3,000,000

c. P1,000,000

d. P12,000,000

Reference no: EM132952811

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