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
to the acquisition of goods and services in both the public and
private sectors.
Effective Contract Management Develop a contract management strategy for each of the following public services. That is,...
Effective Contract Management
Develop a contract management strategy for each of the following
public services. That is, you are assuming that the
following three services will be provided by private
contractors. Thus, your job is to develop an adequate
strategy to effectively manage these three separate privatization
endeavors. Make sure to link your strategies to concepts
and issues discussed in the readings. The services
are:
Parking meter maintenance and collection in a city
Water distribution through a city
Operation of homeless shelters in a...
Revenue recognition at a point in time or over time Kleymenova Consulting, Inc., enters into a...
Revenue recognition at a point in time or over time
Kleymenova Consulting, Inc., enters into a contract to provide
consulting services
1. The consulting services are the provision of technical
computer assistance as needed. For $25,000 per month, whenever the
client has a problem, it contacts Kleymenova, which dispatches a
consultant to address the problem at no additional charge.
2. The consulting services are to develop a new customer payment
collection system for the client. The $300,000 contract price is...
A firm enters into an 8-year contract for materials that cost $90,000 initially and $30,000/yr beginning...
A firm enters into an 8-year contract for materials that cost
$90,000 initially and $30,000/yr beginning at the end of the
4th year. The company decides to make a lump sum payment
at the end of year 2 to pay off the remainder of the contract. What
lump sum is necessary at 8% interest?
Lim & Joyce Consulting provides consulting services related to project management and analytical support. It operates...
Lim & Joyce Consulting provides consulting services related
to project management and analytical support. It operates in a very
tight local labour market and is having difficulty finding quality
staff. The firm bills $350 per hour for services performed. The
labour cost per hour paid by Lim & Joyce Consulting for
professional staff time is $135.
Additional information is provided as follows:
• Billable hours to clients for the year ended totalled 10 000,
consisting of: analytical support services, 3...
An asset with the first cost of $100,000 is depreciated over a 5-year period. It is...
An asset with the first cost of $100,000 is depreciated over a
5-year period. It is expected to have a $10,000 salvage value at
the end of 5 years.
(1) Using the straight-line method, what is the net book value
at the end of year 2?
(2) Using the sum of years digit method, what is the
depreciation expense for year 1?
(3) Using the double-declining balance method, what is the
depreciation expense for year 3?
Plz type the answer...
Mercure Corporation enters into a contract with Pluton Ltd. to provide a system that manages Pluton’s...
Mercure Corporation
enters into a contract with Pluton Ltd. to provide a system that
manages Pluton’s portfolio of clients for 5 years. Mercure will not
transfer the system to Pluton, but it will provide the system and
the services included in the contract while it is still valid. The
contract is renewable for subsequent one-year periods. Mercure
incurred the following costs to obtain the contract:
$2,000 bonus paid to the accounting department for preparing
the proposal at very short notice....
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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