Question: On June 1 , 2 0 2 4 , Emmet Property Management entered into a 2 - year contract to oversee leasing and maintenance for

On June 1,2024, Emmet Property Management entered into a 2-year contract to oversee leasing and maintenance for an apartment building. The contract starts on July 1,2024. Under the terms of the contract, Emmet will be paid a fixed fee of $51,000 per year and will receive an additional 10% of the fixed fee at the end of each year provided that building occupancy exceeds 80%. Emmet estimates a 25% chance it will exceed the occupancy threshold, and concludes the revenue recognition over time is appropriate for this contract.
Assume that Emmet accrues revenue each month, and estimates variable consideration as the most likely amount. On November 1, Emmet revises its estimate of the chance the building will exceed the 80% occupancy threshold to a 60% chance. What is the total amount of revenue Emmet should recognize on this contract in November of 2024?
Note: Do not round intermediate calculations. Round final answer to whole dollars.
Assume that Emmet accrues revenue each month, and estimates variable consideration as the most likely amount. On November 1, Emmet revises its estimate of the chance the building will exceed the 80% occupancy threshold to a 60% chance. What is the total amount of revenue Emmet should recognize on this contract in November of 2024?
Note: Do not round intermediate calculations. Round final answer to whole dollars.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!