Current Attempt in Progress $103200 Marigold Company enters into a contract with a customer to build a warehouse for $400700, with a performance bonus of that will be paid based on the timing of completion. The amount of the performance bonus decreases by 20% per week for every week beyond the agreed-upon completion date. The contract requirements are similar to contracts that Marigold has performed previously, and management believes that such experience is predictive for this contract. Management estimates that there is a 50% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed 1 week late, and a 20% probability that it will be completed 2 weeks late. What is the total transaction price for this revenue arrangement? $462620 O $483260 O $489452 $503900

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Current Attempt in Progress
$103200
Marigold Company enters into a contract with a customer to build a warehouse for $400700, with a performance bonus of
that will be paid based on the timing of completion. The amount of the performance bonus decreases by 20% per week for every week
beyond the agreed-upon completion date. The contract requirements are similar to contracts that Marigold has performed previously
and management believes that such experience is predictive for this contract. Management estimates that there is a 50% probability
that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed 1 week late, and a
20% probability that it will be completed 2 weeks late. What is the total transaction price for this revenue arrangement?
O $462620
O $483260
O $489452
$503900
Transcribed Image Text:Current Attempt in Progress $103200 Marigold Company enters into a contract with a customer to build a warehouse for $400700, with a performance bonus of that will be paid based on the timing of completion. The amount of the performance bonus decreases by 20% per week for every week beyond the agreed-upon completion date. The contract requirements are similar to contracts that Marigold has performed previously and management believes that such experience is predictive for this contract. Management estimates that there is a 50% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed 1 week late, and a 20% probability that it will be completed 2 weeks late. What is the total transaction price for this revenue arrangement? O $462620 O $483260 O $489452 $503900
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