Question

The contract starts on July 1, 2018. Under the terms of the contract, Emmett will be paid a fixed fee of $50,000 per year and will receive an additional 15% of the fixed fee at the end of each year provided that building occupancy exceeds 90%. Emmett estimates a 30% chance it will exceed the occupancy threshold, and concludes that revenue recognition over time is appropriate for this contract. Assume Emmet estimates variable consideration as the most likely amount. How much revenue should Emmet recognize on this contract in 2018

Answer 1

75,000$

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