Sanjeev Enters into a Contract Offering Uncertain Consideration

question 100

Multiple Choice

Sanjeev enters into a contract offering uncertain consideration. The contract pays him $1,000/month for six months of continuous consulting services. In addition, there is a 60% chance the contract will pay an additional $2,000 and a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev estimates uncertain consideration using the most likely amount. What is the amount of revenue Sanjeev would recognize for the first month of the contract?

• A)$0.
• B)$1,000.
• C)$1,333.
• D)$1,400.

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Definitions:

A/C Compressor

A mechanical pump driven by a vehicle's engine or an electric motor, part of the air conditioning system, responsible for compressing and circulating refrigerant.

R-134a Refrigerants

A type of hydrofluorocarbon (HFC) refrigerant used in automotive and residential air conditioning systems noted for its low impact on the ozone layer.

Electronic Leak Detector

Handheld devices with a flexible probe used to seek out refrigerant leaks. When a leak is detected, a flashing light or buzzer signals the technician.

Truck A/C System

The air conditioning system in a truck, designed to cool the interior of the vehicle to enhance occupant comfort.