Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. sanjeev enters into a contract offering variable c

Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six...

60.1K

Verified Solution

Question

Accounting

Sanjeev enters into a contract offering variable consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000 and a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev concludes that this contract qualifies for revenue recognition over time.
Assume that Sanjeev estimates variable consideration as the most likely amount. After Sanjeev has recognized revenue for two months of the contract, he changes his assessment of the chance the contract will pay him $3,000 to 70%. What adjustment to revenue should Sanjeev recognize to account for that change in estimate?
A) Debit of $1,000
B) Credit of $334
C) Credit of $1,000
D) Debit of $334

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

FINDING A PROBABILITY A movie complex is showing three action films and three comedy films....

Algebra
Q

1. Which of these cells is capable of phagocytosis? Red blood cells NK cells Mast cells...

Medical Sciences
Q

Using an induction proof technique, prove that the sum from i=1 to n of (2i-1) equals...

Advance Math
Q

Two thin wires A and B of equal length L and equal cross sectional area...

Physics
Q

Millings Company has developed the following budgeted income statement: Sales Revenue (1600 units

Accounting
Q

Required information [The following information applies to the questions displayed below]...

Accounting
Q

Net income will result during the time period when Select one:...

Accounting
Q

2. Community and problem-oriented policing has been championed with good reason as the solution to...

Accounting
Q

Cost-plus pricing adds an amount to a. The cost of the product or service to...

Accounting
Q

explain the meaning of the term matching concept

Accounting
Q

Company provides transportation services for clients. On June 1, the company receives $8,000 cash from...

Accounting
Q

For this discussion, please look at one of the resources mentioned in the lesson ...

Accounting