Answer:
The correct answer is option (B).
Explanation:
According to the scenario, computation of the given data are as follows:
As probability is not correctly given.
Let probability be:
July 31, 2021 = 65%
August 7, 2021 = 25%
August 14, 2021 = 5%
August 21, 2021 = 5%
So, We can calculate the transaction price by using following formula:
Transaction price = (Amount + Bonus) × Probability
July 31, 2018 = ($950,000 + $50,000) × 65% = $650,000
August 7, 2018 = ($950,000 + $40,000) × 25% = $247,500
August 14, 2018 = ($950,000 + $30,000) × 5% = $49,000
August 21, 2018 = ($950,000 + $20,000) × 5% = $48,500
So, Total transaction price = $650,000 + $247,500 + $49,000 + $48,500
= $995,000
