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On january 1 revis consulting enters into a contract to complete a cost reduction program for green financial
over a six-month period. green will pay revis $20,000 at the end of each month. if total cost savings reach a
specific target, green will pay an additional $10,000 to revis at the end of the contract, but if total cost savings
fall short, revis will refund $10,000 to green. revis estimates an 80% chance that cost savings will reach
the target and calculates the contract price based on the probability-weighted amounts of future payments to be
received. revis accounts for this arrangement.
required:
prepare the following journal entries for revis:
1. the journal entry on january 31 to record the first month of revenue under the contract.
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Answers: 2
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On january 1 revis consulting enters into a contract to complete a cost reduction program for green...
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