Exercise 18-8 Wildhorse's Agency sells an insurance policy offered by Capital Insurance Company for a...
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Accounting
Exercise 18-8 Wildhorse's Agency sells an insurance policy offered by Capital Insurance Company for a commission of $92 on January 2, 2017. Wildhorse will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Wildhorse does not have any remaining performance obligations. Based on Wildhorse's significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first year before terminating their insurance policy. It has no evidence to suggest that previous policyholder behavior will change Determine the transaction price of the arrangement for Wildhorse, assuming 110 policies are sold Transaction price LINK TO TEXT LINK TO TEXT Determine the revenue that Wildhorse will recognize in 2017. (Round answer to 0 decimal places, e.g. 5,125.) Revenue $ LINK TO TEXT LINK TO TEXT
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