Thomas Consultants provided Bran Construction with assistance in implementing various cost-savings initiatives. Thomas contract specifies that it will receive a flat fee of $54,000 and an additional $24,000 if Bran reaches a prespecified target amount of cost savings. Thomas estimates that there is a 25% chance that Bran will achieve the cost-savings target.

Required:

1.	Assuming Thomas uses the expected value as its estimate of variable consideration, calculate the transaction price.

2.	Assuming Thomas uses the most likely value as its estimate of variable consideration, calculate the transaction price.

3.	Assume Thomas uses the expected value as its estimate of variable consideration, but is very uncertain of that estimate due to a lack of experience with similar consulting arrangements. Calculate the transaction price.

Sarjit Systems sold software to a customer for $166,000. As part of the contract, Sarjit promises to provide free technical support over the next six months. Sarjit sells the same software without technical support for $144,000 and a stand-alone six-month technical support contract for $36,000, so these products would sell for $180,000 if sold separately.

Prepare Sarjits journal entry to record the sale of the software