On December 31, 2018, TurKs Company sIgned an agreement to operate as franchisee of Wendy's for a franchise fee of P80,000. Of this amount, P30,000 was paid upon signing of the agreement and the balance is payable in five annual payments of P10,000 each beginning December 31, 2019. The present value of the five payment, at an appropriate rate of interest, is P56,000 at December 31, 2018. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The collection of note receivable is reasonably certain. Wendy's Company should report unearned revenue from franchise fee in its December 31, 2019 balance sheet at: Select the correct response: P80,000 P66,000 P30,000

On December 31, 2018, TurKs Company sIgned an agreement to operate as franchisee of Wendy's for a franchise fee of P80,000. Of this amount, P30,000 was paid upon signing of the agreement and the balance is payable in five annual payments of P10,000 each beginning December 31, 2019. The present value of the five payment, at an appropriate rate of interest, is P56,000 at December 31, 2018. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The collection of note receivable is reasonably certain. Wendy's Company should report unearned revenue from franchise fee in its December 31, 2019 balance sheet at: Select the correct response: P80,000 P66,000 P30,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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