Ejaaz enters into a contract offering variable consideration.
The contract pays him $2000/month for six months of continuous
consulting services. In addition, there is a 80% chance the
contract will pay an additional $4800 and a 20% chance the contract
will pay an additional $1200, depending on the outcome of the
consulting contract. Ejaaz concludes that this contract qualifies
for revenue recognition over time.
Assume Ejaaz estimates variable consideration as the most likely
amount. What is the amount of revenue Ejaaz would recognize for the
first month of the contract?
$2400 |
||
$2800 |
||
$2000 |
||
$3840 |
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