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e the fo nchisee

e the fo nchisee

FINANCIAL ACCOUNTING
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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1. Assume the following data pertaining to Franchise agreement between Franchisor Mayang and Franchisee Mark at the start of 2017: 12 years 1,200,000 300,000 150,000 Useful life of franchise Initial franchise fee Downpayment Balance payable in 6 equal installment Implicit rate of borrowing Present value of ordinary annuity of 1 for 6 periods 4.11 12% The note is a non-interest bearing note On December 31, 2017, the initial services required of the franchise agreement are substantially performed. The total cost of such services amounted to P229,125. Required; Compute the following, On the books of the frnachisor 1. Total cash received by franchisor is 2017 2. Interest income 2017 3. Franchise fee revenue on 12/31/17 4. Gross profit rate 5. Using installment method, realized Gross revenue on 12/31/17 6. Balance of notes receivable on 12/31/18
Transcribed Image Text:1. Assume the following data pertaining to Franchise agreement between Franchisor Mayang and Franchisee Mark at the start of 2017: 12 years 1,200,000 300,000 150,000 Useful life of franchise Initial franchise fee Downpayment Balance payable in 6 equal installment Implicit rate of borrowing Present value of ordinary annuity of 1 for 6 periods 4.11 12% The note is a non-interest bearing note On December 31, 2017, the initial services required of the franchise agreement are substantially performed. The total cost of such services amounted to P229,125. Required; Compute the following, On the books of the frnachisor 1. Total cash received by franchisor is 2017 2. Interest income 2017 3. Franchise fee revenue on 12/31/17 4. Gross profit rate 5. Using installment method, realized Gross revenue on 12/31/17 6. Balance of notes receivable on 12/31/18
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