White Labs Is a Wholesaler Who Sells Microscopes for Use

question 149

Multiple Choice

White Labs is a wholesaler who sells microscopes for use in high schools to retailers. On August 1 White contracts with the XYZ to sell 1,000 microscopes to XYZ to be delivered September 1. The contract price is set at $370 each, with a 10% volume discount if sales exceed 2,500 microscopes within the year. The probability of sales exceeding 2,500 microscopes is expected to be 55%. Ignore any constraints on variable consideration. Using the most-likely-amount approach, the consideration to be recognized is estimated to be ________.

• A) $333,000
• B) $370,000
• C) $203,500
• D) $37,000

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Definitions:

Payroll Tax

Contributions demanded from either employees or employers, frequently calculated based on the salaries that staff are awarded by their employers.

Personal Income Tax

A tax levied on an individual's total personal income, taking into account wages, salaries, and other sources of income.

Federal Government Spending

Expenditures by the federal government on goods, services, and obligations, including defense, welfare, and public works.

Federal Income Tax

A tax levied by the U.S. federal government on individuals and entities based on their annual income, with rates that vary by income level.