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24 March, 16:15

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.

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  1. 24 March, 17:13
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    Answer: $64,800

    Explanation:

    The expected is calculated as follows:

    Expected amount

    $88,000 ($59,000 fixed fee + 29,000 bonus) * 20% = $17,600$59,000

    ($59,000 fixed fee + 0 bonus) * 80% = 47,200

    Expected contract price at inception$64,800Or
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