problem 56

d. If the coupon offered were instead 20% on purchas on would the answers change to parts a and b, if at all:? A contractor enters into a revenue contract with a customer to build customized equipment for $100,000 performance bonus of $55,000 that will be paid based on how quickly the equipment is completed. The a of the performance bonus decreases by 15% of the original bonus per week for every week beyond the upon completion date. The contractor has had experiences with similar contracts and thus has th the timing of completion of the contract. Therefore, the contractor concludes that the expected value the best predictor of revenue. The contractor estimates that there is a 65% pro completed by the agreed upon completion date, a 25% probability that it will be completed one week 10% probability that it will be completed two weeks lat Required Determine the transaction price for revenue recognition for the contractor with Exercise 7-56 Determining the agreed. to predic Price Contract LO4 bability that the contract will be week late, and a Exercise 7-57 A contractor enters into a revenue contract to construct customized equipment for a customer. The contract is $100,000 plus a $50,000 bonus if the customized equipment is completed by a specified date. The contract is Price expected lo take three years to complete. The contractor has extensive experience in building customized equi- ment. The award fee is paid only if the customized equipment is completed by the agreed upon date. Otherwise Contract LO4