You are a service associate with a major company. When you sell a service, the customer pays cash and you provide the service. At the end of each year, you are required to estimate how much of each outstanding service contract has been earned. At year-end, you have $100,000 of outstanding contracts. You estimate that you have earned somewhere between 40% and 60% of those contracts.
Required
Under the following independent conditions, identify the amount of outstanding contracts that you would report earned. Explain why you would report those amounts.
a. Your compensation is based on performance, and you are $80,000 short of your quota before your estimate.
b. Your compensation is based on performance, and you are $50,000 short of your quota before your estimate.
c. Your compensation is based on your group's performance, and while you have met your quota before your estimate, the group needs $60,000 to meet the group quota.