Ping Inc. granted a franchise to Tito Inc. to operate its registered business of barbershop. The contract was signed on January 1, 2020 with initial franchise fee of P 500,000 payable in P 200,000 cash and the balance in five equal semi-annual installments every June 30 and December 31. The non-interest bearing promissory note (reasonably assured) has implicit rate of 10% (PVF = 4.32948). The contract provides that Tito Inc. shall pay a contingent franchise fee equal to 5% of the revenue from the barbershop. Tito Inc. reported a revenue in the amount of P 100,000 during the 2020. Ping Inc. has substantially performed all the services required under the franchise contract.

Ping Inc. granted a franchise to Tito Inc. to operate its registered business of barbershop. The contract was signed on January 1, 2020 with initial franchise fee of P 500,000 payable in P 200,000 cash and the balance in five equal semi-annual installments every June 30 and December 31. The non-interest bearing promissory note (reasonably assured) has implicit rate of 10% (PVF = 4.32948). The contract provides that Tito Inc. shall pay a contingent franchise fee equal to 5% of the revenue from the barbershop. Tito Inc. reported a revenue in the amount of P 100,000 during the 2020. Ping Inc. has substantially performed all the services required under the franchise contract.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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