Question
In: Accounting
Jonas Consulting enters into a contract to provide cost management consulting services over a one-year period...
Jonas Consulting enters into a contract to provide cost management
consulting services over a one-year period for $10,000 per month on
January 1. At the end of the contract, Jonas will either give the
customer a $24,000 refund or be entitled to an additional $24,000,
depending on the level of cost savings. The company believes there
is an 80% chance that it will be entitled to an additional $24,000
and a 20% chance it will give a refund of $24,000. In addition,
Jonas believes it is probable that a significant reversal of any
previously recognized revenue will not occur. The contract
performance is determined to be satisfied over time.
Required:
1. Determine the monthly transaction price that Jonas should use
for recording the contract and prepare Jonas’s journal entry at the
end of the first month of the contract using the most likely amount
approach.
2. Next Level What is the objective of determining the transaction
price based on the amount of variable consideration?
Analysis:
Determine the monthly transaction price that Jonas should use for recording the contract using the most likely amount approach.
Monthly transaction price $_______________
General Journal (3 Accounts):
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Jonas Consulting enters into a contract to provide cost management consulting services over a one-year period...
Jonas Consulting enters into a contract to provide cost
management consulting services over a one-year period for $10,000
per month on January 1. At the end of the contract, Jonas will
either give the customer a $24,000 refund or be entitled to an
additional $24,000, depending on the level of cost savings. The
company believes there is an 80% chance that it will be entitled to
an additional $24,000 and a 20% chance it will give a refund of
$24,000....
1. On November 1, 2018, Taylor signed a one-year contract to provide handyman services on an...
1. On November 1, 2018, Taylor signed a one-year contract to
provide handyman services on an as-needed basis to King Associates,
with the contract to start immediately. King agreed to pay Taylor
$5,400 for the one-year period. Taylor is confident that King will
pay that amount, but payment is not scheduled to occur until 2019.
Taylor should recognize revenue in 2018 in the amount of
Multiple Choice
a. $900
b. $2,700
c. $0
d. $5,400
2.
Mary signed up and...
discuss now strategic cost management and contract management apply to the acquisition of goods and services...
discuss now strategic cost management and contract management apply
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private sectors.
Effective Contract Management Develop a contract management strategy for each of the following public services. That is,...
Effective Contract Management
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endeavors. Make sure to link your strategies to concepts
and issues discussed in the readings. The services
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Parking meter maintenance and collection in a city
Water distribution through a city
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Additional information is provided as follows:
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An asset with the first cost of $100,000 is depreciated over a 5-year period. It is...
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Plz type the answer...
Mercure Corporation enters into a contract with Pluton Ltd. to provide a system that manages Pluton’s...
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What are the salient characteristics of strategic cost management and contract management?
What are the salient characteristics of strategic cost management
and contract management?
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