On December 1, 20x1, ABC Co. granted a 5-year franchise right to DEF Co. for an initial franchise fee of $400,000. The non-refundable initial franchise fee was collected in full upon signing of the contract. As of December 31, 20x1, ABC has no remaining obligation or intent to refund any of the cash received, all of the services pertaining to pre-opening activities to set-up the contract have been performed and there are no other material conditions or obligations required of ABC under the franchise agreement. If the promise to grant the franchise right is not distinct and that the performance obligations is satisfied at a point in time, how much revenue shall ABC recognize in December 31, 20x1? 400,000 80,000 0 None of these
On December 1, 20x1, ABC Co. granted a 5-year franchise right to DEF Co. for an initial franchise fee of $400,000. The non-refundable initial franchise fee was collected in full upon signing of the contract. As of December 31, 20x1, ABC has no remaining obligation or intent to refund any of the cash received, all of the services pertaining to pre-opening activities to set-up the contract have been performed and there are no other material conditions or obligations required of ABC under the franchise agreement.
If the promise to grant the franchise right is not distinct and that the performance obligations is satisfied at a point in time, how much revenue shall ABC recognize in December 31, 20x1?
400,000
80,000
0
None of these
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