On January 1, 20x1, LOMI Ko charges an initial fee of P8,000,000 for the franchise, with P1,600,000 amount paid when the agreement was signed by both parties and the balance in four equal annual payments. The present value of the four equal annual payments is P5,070,000, which is discounted at 10%. The franchisee has the right to purchase P300,000 of supplies and equipment for P250,000. An additional part of the initial fee is for advertising to be provided by LOMI Ko during the next five years. The amount of advertising is P5,000 a month. The collectability is reasonably assured and LOMI Ko has performed all the initial services provided in the contract. How much is the revenue from the franchise? [Select] [Select] 6,670,000 7,650,000 BONUS 8,000,000 6,320,000 transaction would include?

On January 1, 20x1, LOMI Ko charges an initial fee of P8,000,000 for the franchise, with P1,600,000 amount paid when the agreement was signed by both parties and the balance in four equal annual payments. The present value of the four equal annual payments is P5,070,000, which is discounted at 10%. The franchisee has the right to purchase P300,000 of supplies and equipment for P250,000. An additional part of the initial fee is for advertising to be provided by LOMI Ko during the next five years. The amount of advertising is P5,000 a month. The collectability is reasonably assured and LOMI Ko has performed all the initial services provided in the contract. How much is the revenue from the franchise? [Select] [Select] 6,670,000 7,650,000 BONUS 8,000,000 6,320,000 transaction would include?

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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