March 31st entry Revenue Recognition - Graded Assignment Question 1: On November 1, 2021 Jones & Hill, a consulting firm, enters a contract to help BGSE, a local pediatric dental provider, design a marketing strategy to compete with Kids Kings Dental. The contract spans six months. BGSE promises to pay $12,250 at the end of each month. At the end of the contract, Jones & Hill either will give BGSE a refund of $4,500 or will be entitled to an additional $4,500 bonus, depending on whether services at BGSE have increased to a target level. April 30th entries At the inception of the contract, Jones & Hill estimates an 85% chance that it will earn the $4,500 bonus and calculates the contract price based on the expected value of future payments to be received At the beginning Harris of the 5th month, March 1st and after recording the February 28th entry, circumstances change, and Jones & Hill revises to 55% its estimate of the probability that it will earn the bonus. At the end of the contract, Jones & Hill do not receive the additional consideration of $4,500 and are required to refund BGSE. Additionally, please indicate amounts to be reported on the balance sheet (ignore cash) and income statement on December 31, 2021 for Jones & Hill. Balance Sheet - December 31, 2021 Assume Jones & Hill has a December 31st year-end. Income Statement For Year-ended December 31, 2021 Required: Briefly describe the difference between the most likely amount" and the expected value approach." Prepare the journal entries related to the contract as indicated. Journal Entry November 30th Entry on March 1st to adjust based on the revised estimate March 31st entry Revenue Recognition - Graded Assignment Question 1: On November 1, 2021 Jones & Hill, a consulting firm, enters a contract to help BGSE, a local pediatric dental provider, design a marketing strategy to compete with Kids Kings Dental. The contract spans six months. BGSE promises to pay $12,250 at the end of each month. At the end of the contract, Jones & Hill either will give BGSE a refund of $4,500 or will be entitled to an additional $4,500 bonus, depending on whether services at BGSE have increased to a target level. April 30th entries At the inception of the contract, Jones & Hill estimates an 85% chance that it will earn the $4,500 bonus and calculates the contract price based on the expected value of future payments to be received At the beginning Harris of the 5th month, March 1st and after recording the February 28th entry, circumstances change, and Jones & Hill revises to 55% its estimate of the probability that it will earn the bonus. At the end of the contract, Jones & Hill do not receive the additional consideration of $4,500 and are required to refund BGSE. Additionally, please indicate amounts to be reported on the balance sheet (ignore cash) and income statement on December 31, 2021 for Jones & Hill. Balance Sheet - December 31, 2021 Assume Jones & Hill has a December 31st year-end. Income Statement For Year-ended December 31, 2021 Required: Briefly describe the difference between the most likely amount" and the expected value approach." Prepare the journal entries related to the contract as indicated. Journal Entry November 30th Entry on March 1st to adjust based on the revised estimate