initial franchise fee
Q: Nori Restaurant sold a fast-food restaurant franchise to Irish. The sale agreement, signed on…
A: Given, Down payment = P 200,000 Installment = P 100,000 Commission charge on sales = 10% Sales on…
Q: Tulane Tires wrote a contract for a $100,000 sale to the new Garden District Tour Company. Tulane…
A: Given information is: Tulane Tires wrote a contract for a $100,000 sale to the new Garden District…
Q: On December 31, 2020, Rice, Inc. authorized Graft to operate as a franchisee for an initial…
A: Unearned Franchise Fees:-It is an amount for which the company has performed services but does not…
Q: On January 1, 20x8, Jolybee Corporation sold a franchise to Mr. AMG for P10,000,000 for the right to…
A: The process by which financial transactions of the business are recorded and communicated with the…
Q: Sr. Juan Inc. a franchisor, entered into a franchise agreement with Mang Pedro, franchisee, on March…
A: Franchise Agreement The purpose of providing the franchise agreement is to use the brand and name of…
Q: Byrd Corporation engaged in the following transactions at the beginning of 2019: a. Purchased a…
A: Definition:
Q: On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial…
A: It is an accounting principle that states the conditions in which the revenue should be recognized…
Q: Momong Company sells a franchise with initial franchise fee of P70,000. A downpayment of P20,000…
A: A franchise is a business opportunity that permits the franchisee to begin a business by lawfully…
Q: On January 1, 2021, Entity A granted a franchise to Entity B involving a food stall. The franchise…
A: A franchise is an agreement between the franchisor and franchisee in which license is granted to…
Q: On December 31, 2021, Mr. Eusebio enters into a contract will Brandon Corp, to transfer a license…
A: On transfer of the license of a franchise a specific fee is paid, it is called franchise fees. They…
Q: ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC…
A: Franchise is defined as the business form that includes the existing business allow the third party…
Q: C.600,000
A: The transaction price will need to be allocated to the construction of the of the franchisee's…
Q: ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC…
A: Franchise is defined as the form of the business that includes the business which is in operation or…
Q: On January 1, 2020, an entity granted a franchise to a franchisee. The franchise agreement requires…
A: Revenue is recognized on fulfilling the performance obligation. The royalty is recognized on making…
Q: Saar Associates sells two licenses to Kim & Company on September 1, 2021. First, in exchange for…
A: Revenues: Revenues are earnings from operations of a business.
Q: Watts Inc. charges an initial franchise fee of P690,000, with P150,000 paid when the agreement is…
A: Revenue is the amount of money earned from anything like sales, services etc. It is the gross amount…
Q: At the beginning of current year, Hart Company si agreement to operate as a franchisee for an…
A:
Q: On December 1, 20x1, ABC Co. granted a 5-year franchise right to DEF Co. for an initial franchise…
A: Franchise agreement: It is a formal, binding contract between the franchisor and the franchisee. In…
Q: 1. On December 31, 2020, Rice, Inc. authorized Graft to operate as a franchisee for an initial…
A: “Since you have posted a many questions, we will solve first question for you. To get the remaining…
Q: . On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an…
A: Revenue: Revenue can be defined as the inflow of cash within the organization resulting from the…
Q: On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial…
A: Revenue ( CANOROUS ) = 400000 + 10%*800000 = ₱480000
Q: Mean Dones and Jeremie Jane Roldan Inc. charges an initial franchise fee of P920,00, with P200,000…
A: This question deals with how much revenue should be recorded as the revenue from franchise fee.…
Q: Kami, Inc. charges an initial franchise fee of P500,000 for the right to operate to operate as a…
A: The franchise revenue is recognized at the time of providing service and the payment of the…
Q: On January 1, 2021, Entity A granted a franchise to Entity B involving a food stall. The franchise…
A: Franchise is a type of joint venture. There are two parties involved, one is franchisor who owns the…
Q: On December 1, 20X1, CANOROUS Co. granted a 5-year franchise to MELODIOUS, Inc. for an initial…
A: Revenue refers to the amount earned or accrued to the firm. If the firm is engaged in selling the…
Q: Ping Inc. granted a franchise to Tito Inc. to operate its registered business of barbershop. The…
A: GIVEN Ping Inc granted a franchise to Tito Inc to operate its registered business of barbershop.…
Q: Discuss the implication of the transactions and state the journal entries on January 1, 2020 for…
A: Introduction: Lease: Lease can be defined as a legal agreement between the lessor and the lessee in…
Q: Mean Dones and Jeremie Jane Roldan Inc. charges an initial franchise fee of P920,00, with P200,000…
A: solution given Initial franchise fee 920000 Payment on date of agreement 200000 The…
Q: ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC…
A: Franchise is a method of distributing product or services between two parts.it includes two parts 1)…
Q: Brave Corporation authorized Heart on January 1, 2010 to operate as a franchisee for an initial…
A: Franchise is a way of expanding the operations of the business worldwide. Any company can sell its…
Q: On January 3, 2008, PP Services, Inc. signed an agreement authorizing CC Company to operate as a…
A: Since we have received 50000 as initial franchise fees for 20 years then this 50000 is apportioned…
Q: Nori Restaurant sold a fast-food restaurant franchise to Irish. The sale agreement, signed on…
A: Step 1: Calculate the present value of two annual payments as follows: MS-Excel -->Formulas…
Q: On 1 January 2018, LFC Bhd acquired a fast food franchise for RM300,000. The legal life of the…
A: Journal entry on 31st december 2018 Particulars Debit Credit Franchise asset A/C Dr 300000…
Q: On January 1, 2018, an entity granted a franchise to a franchisee. The franchise agreement required…
A: Upfront non-refundable Franchisee Fee: Instead, the upfront price is seen as a down payment for…
Q: Jolibi, Inc. enters into an agreement with Ronald’s Co., clothing the later with full authority to…
A: Step 1 - The initial Franchise revenue can only be recorded when the franchiser has established…
Q: Discuss the implication of the transactions and state the journal entries on January 1, 2020
A: Understanding implication: According to the facts of the case, the transfer to MacCo is meeting…
Q: On January 1, 2020, an entity granted a franchise agreement to a franchisee. The contract provides…
A: On 01.01.2020, Entity granted a franchise agreement to a franchisee Franchise agreement = Franchise…
Q: In relation to the nonrefundable upfront fee, the franchise agreement required the entity to render…
A: Revenue is recognised when the performance obligation is met. The royalty is realised when sales are…
Q: On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial…
A: Franchise is a marketing concept adopted by organizations as a strategy for business expansion. It…
Q: 1. On January 1, 20x4, Drexler signed an agreement to operate as a franchisee of Houston Copy…
A: Answer - Working Note - Calculation of carrying amount of the franchise on December 31, 20x4 -…
Q: A Franchisor entered into a franchise agreement with B, franchisee, on March 31, 2021. The total…
A: A franchise is an agreement in which the owner of the asset (an asset can be the intangible asset or…
Q: On 01.10.20X1, TK transfers the annual rent of EUR 7,000 for the business and office space for one…
A: when there is payment in advance it is treated as prepaid from the point of view of the one who paid…
Q: On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial…
A: On December 01, 20x1 CANOROUS Co. granted a franchise right to MELODIOUS Inc. Initial fees = P400000…
Q: On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are…
A: Franchise Agreement In simple word the word franchise agreement which is described as legal…
Q: On January 1, 20x20, an entity granted a franchise to a franchisee. The franchise agreement…
A: The question is based on the concept of Financial Accounting.
Q: 1. On January 1, 20x4, Drexler signed an agreement to operate as a franchisee of Houston Copy…
A: Intangible Related Expenses for the end of December 31 20x4 Franchise and Licenses Down…
Q: ABC sells franchise arrangement throughout La Trinidad and Itogon. Under a franchise agreement, ABC…
A: Explanation: Franchise fee 1000,000 Direct cost (30, 000 + 3,00,000) (330,000) Deferred…
Q: On January 1, 2020, an entity granted a franchise agreement to a franchisee. The contract provides…
A: Gross profit to be recognized by the entity for the year ended December 31, 2020 in relation to the…
Q: Collins, Inc., entered into a 10-year franchise agreement with an individual. For an initial…
A: The franchisor can generate revenue by way of initial franchise fees or continuing franchise fees.…
- Saisaki Corporation grants a franchise to Mity for an initial franchise fee of P 1,000,000. The agreement provides that Saisaki has the option within one year to acquire franchisee’s business, and it seems certain that Saisaki will exercise this option. On Saisaki’s books, how should the initial fee be recorded?
- Deferred and treated as reduction in Saisaki investment when the option is exercised
- Realized revenue
- Extraordinary revenue
- Deferred revenue to be amortized
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- A Franchisor entered into a franchise agreement with B, franchisee, on March 31, 2021. The total franchise fee is P500,000, of which P100,000 is payable upon signing and the balance in four equal annual installments. The down payment is refundable in the event the franchisor fails to render services and none thus far had been rendered. When B's prepares its financial statements on March 31, 2021, the franchise fee revenue to be reported is?On January 1, 2020, an entity granted a franchise to a franchisee. The franchise agreement requires the franchisee to pay a non refundable upfront fee in the amount of P400,000 and on-going payment of royalties equivalent to 5% of the sales of the franchisee. The franchisee paid the non refundable upfront fee on January 1, 2020. In relation to the non refundable upfront fee, the franchise agreement requires the entity to render the following performance obligations: a) To construct the franchisee's stall with stand-alone selling price of P200,000 b) To deliver 10,000 units of raw materials to the franchisee with stand-alone selling price of P250,000 c) To allow the franchisee to use the entity tradename for a period of 10 years starting January 1, 2020 with stand-alone selling price of P50,000. On June 30, 2020, the entity completed the construction of the franchisee's stall. As of December 31, 2020, the entity was able to deliver 3,000 units of raw materials to the franchisee. For the…Mean Dones and Jeremie Jane Roldan Inc. charges an initial franchise fee of P920,00, with P200,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10%, is P545,872. Franchise operations already started and no future services are required to be performed. The amount of revenue from franchise fee is?
- Watts Inc. charges an initial franchise fee of P690,000, with P150,000 paid when the agreement is signed and the balance in five annual payments. The present value of the future payments, discounted at 10%, is P409,400. The franchisee has the option to purchase P90,000 of equipment for P70,000. Watts has substantially provided all initial services required and collectability of the payments is reasonably assured. The amount of revenue from franchise fees is?Brave Corporation authorized Heart on January 1, 2010 to operate as a franchisee for an initial franchise fee of P2,500,000. Of this amount, P1,500,000 was received upon signing of the contract and the balance is due in two equal annual payments beginning January 1, 2011. The contract provides that the nonrefundable downpayment represents fair measure of the services already performed, however, substantial performance is still required of Brave. Collectibility of the note is reasonably certain. If the present value of the two annual payments is P895,000, what amount of unearned franchise fees from Heart should Brave report on December 31, 2010?1. On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial franchisefee of ₱400,000 and a 10% sales-based royalty. The initial franchise fee is non-refundable and due upon signing ofthe contract. At contract inception, CANOROUS determines that the nature of its promise to grant the license is toprovide the customer with the right to access CANOROUS’s intellectual property as it exist throughout the licenseperiod. As of December 31, 20x1, CANOROUS has no remaining obligation or intent to refund any of the cashreceived, all the initial services necessary to setup the contract have been performed, and MELODIOUS startedoperating the franchised business. MELODIOUS reported sales of ₱800,000 for 20x1. How much revenue shallCANOROUS recognize in 20x1?
- Tulane Tires wrote a contract for a $100,000 sale to the new Garden District Tour Company. Tulane onlyanticipates a slightly greater than fifty percent chance that Garden will be able to pay the amounts that Tulaneis entitled to receive under the contract. Upon delivery of the tires, assuming no payment has yet been made byGarden, how much revenue should Tulane recognize under U.S. GAAP?1. On January 1, 2020, Sheffield signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $60,750. The agreement also provides that 6% of the revenue from the franchise must be paid to the franchisor annually. Sheffield’s revenue from the franchise for 2020 was $840,000. Sheffield estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) 2. Sheffield incurred $60,000 of experimental and development…On January 1, 2018, an entity granted a franchise to a franchisee. The franchise agreement required the franchisee to pay a nonrefundable upfront fee in the amount of P800,000 and on-going payment of royalties equivalent to 5% of the sales of the franchisee. The franchisee paid the nonrefundable upfront fee on January 1, 2018. In relation to the nonrefundable upfront fee, the franchise agreement required the entity to render the following performance obligations: · To construct the franchisee’s stall with stand-alone selling price of P400,000. · To deliver 20,000 units of raw materials to the franchisee with stand-alone selling price of P500,000. · To allow the franchisee to use the entity tradename for a period of 10 years starting January 1, 2018 with stand-alone selling price of P100,000. On June 30, 2018, the entity completed the construction of the franchisee’s stall. On December 31, 2018, the entity was able to deliver 6,000 units of raw…
- Momong Company sells a franchise with initial franchise fee of P70,000. A downpayment of P20,000 cash is required, with the balance covered by issuance of P50,000, 10% note payable in five equal annual installments . Question: If all material services have been substantially performed, collectibility of note is reasonably assured, but the refund period has not expired, what is the journal entry to record the transaction: Group of answer choices a. Debit Cash- P20,000; Debit Notes receivable - P50,000; Credit Franchise fees - P20,000; Credit Unearned franchise fees - P50,000 b. Debit Cash - P20,000; Debit Notes receivable - P50,000; Credit Unearned franchise fees - P70,000 c. Debit Cash - P20,000; Debit Notes receivable - P50,000; Credit Franchsie fees - P50,000; Credit Unearned franchise fees - P20,000 d. Debit Cash - P20,000; Debit Notes receivable - P50,000; Credit Franchise fees - P70,000SAPPHIRE CO. charges new franchisees an initial fee of P5,000,000. Of this amount, P2,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by an interest-bearing promissory note. In consideration therefore, SAPPHIRE CO. will assist in locating the business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 3, 2021, Sapphire Co. entered into a franchising agreement with EMERALD, INC. by the end of the year, SAPPHIRE CO. has completed about 25% of the initial services at a cost of P300,000 and it has ascertained that collection of the notes is reasonably assured. For 2021, SAPPHIRE CO. should recognized franchise revenue of:A. 5,000,000 C. 1,700,000B. 2,000,000On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial franchisefee of ₱400,000 and a 10% sales-based royalty. The initial franchise fee is non-refundable and due upon signing ofthe contract. At contract inception, CANOROUS determines that the nature of its promise to grant the license is toprovide the customer with the right to access CANOROUS’s intellectual property as it exist throughout the licenseperiod. As of December 31, 20x1, CANOROUS has no remaining obligation or intent to refund any of the cashreceived, all the initial services necessary to setup the contract have been performed, and MELODIOUS startedoperating the franchised business. MELODIOUS reported sales of ₱800,000 for 20x1. On December 31, 20x1, Entity A enters into a contract with Customer X to transfer a license for a fixed fee of₱100,000 payable as follows: 20% is payable upon signing of contract. 80% is represented by a note receivable collectible in 4 equal…