ABC Corp. signs a contract that provides a fixed fee of $100,000 plus the possibility...
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Accounting
ABC Corp. signs a contract that provides a fixed fee of $100,000 plus the possibility of receiving a bonus. Based on the contract terms and historical experience, ABC estimates a 60% chance of receiving a $10,000 bonus; 30% chance of receiving a $5,000 bonus; and 10% chance of no bonus. In applying the expected value method under ASC 606, the total transaction price is:
a. $107,500
b. $100,000
c. $108,000
d. $110,000
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