Assume Sanjeev estimates variable consideration as the most likely amount.What is the amount of revenue Sanjeev would recognize for the first month of the contract?

Question

Quizplus · Accepted Answer

Variable consideration is estimated as the most likely amount, which is $1,333. This amount is calculated by taking the total contract price of $10,000 and multiplying it by the percentage of completion for the first month, which is 13.33%. Therefore, the revenue recognized for the first month would be $1,333.

Assume Sanjeev Estimates Variable Consideration as the Most Likely Amount