On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for $7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of $600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by $150,000. Elkhart provides the following completion schedule: November 30, 2017 60%
December 7, 2017 20%
December 14, 2017 10%
December 21, 2017 5%
December 28, 2017 5%

Required:
a. Assume that Elkhart used the expected value approach. What amount should Elkhart use for the transaction price?
b. Assume that Elkhart used the most likely approach. What amount should Elkhart use for the transaction price?
c. What is the objective of determinng the transaction price based on the amount of variable consideration?

Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. in this case, the country that produces jeans will produce 32 million pairs per month, and the country that produces corn will produce 32 million bushels per month.

Exercise 8-6 goods in transit [lo8-2] the kwok company's inventory balance on december 31, 2016, was $190,000 (based on a 12/31/16 physical count) before considering the following transactions: 1. goods shipped to kwok f.o.b. destination on december 20, 2016, were received on january 4, 2017. the invoice cost was $35,000. 2. goods shipped to kwok f.o.b. shipping point on december 28, 2016, were received on january 5, 2017. the invoice cost was $22,000. 3. goods shipped from kwok to a customer f.o.b. destination on december 27, 2016, were received by the customer on january 3, 2017. the sales price was $45,000 and the merchandise cost $27,000. 4. goods shipped from kwok to a customer f.o.b. destination on december 26, 2016, were received by the customer on december 30, 2016. the sales price was $25,000 and the merchandise cost $18,000. 5. goods shipped from kwok to a customer f.o.b. shipping point on december 28, 2016, were received by the customer on january 4, 2017. the sales price was $30,000 and the merchandise cost $17,000. required: determine the correct inventory amount to be reported in kwok's 2016 balance sheet.

Suppose an economy has only two sectors: goods and services. each year, goods sells 80% of its outputs to services and keeps the rest, while services sells 62% of its output to goods and retains the rest. find equilibrium prices for the annual outputs of the goods and services sectors that make each sector's income match its expenditures.