What is the transaction price

Assignment Help Accounting Basics
Reference no: EM132943921

Question - Blair Biotech enters into a licensing agreement with Pang Pharmaceutical for a drug under development. Blair will receive a payment of $10,000,000 if the drug receives regulatory approval. Based on prior experience in the drug-approval process, Blair determines it is 90% likely that the drug will gain approval and a 10% chance of denial.

a. Which method of variable consideration should be used to determine the transaction price?

b. What is the transaction price? Show your calculations and clearly label your answer.

a) The third step of the revenue recognition method is to determine the transaction price. The transaction price represents the amount of consideration the company expects to be entitled to in exchange for the goods and services it provides to a customer.

b) The Transaction price is $10,000,000 as Blair will receive a payment of $10,000,000 if the drug receives regulatory approval.

Reference no: EM132943921

Questions Cloud

Explain the components of business plan : Explain the components of business plan for above project (a cell phone shop).
What will be the balance in Sprung capital account : Brown pays $90,000 to the Tripper Sprung Partnership in exchange for 30% ownership. What will be the balance in Sprung capital account
Access the published prosecution case : Write a short description of the unethical practice that has occurred.
Regional economic integration : In Britain this year reported sales of milk and cream to European Union member countries have dropped 96% and chicken and beef have declined by 80%.
What is the transaction price : Blair will receive a payment of $10,000,000 if the drug receives regulatory approval. What is the transaction price
Find out the interval of weights : The weights of elite marathon runners can be described as being normally distributed with mean 63.2 kg and standard deviation 4.8kg. Use the 68-95-99.7 rule to
Calculate price per cubic meters : How do you calculate price per cubic meters in terms of shipping?
What was champan degree of operating leverage : The company's contribution margin ratio was 30%, and total fixed expenses were $7,500. What was Champan's degree of operating leverage in 2020
Elucidate the uses of statistics : Elucidate the uses of statistics in the different areas of operations?

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