A P100,000 franchise involves one performance obligation tobe performed over a period of 5 years. If the franchisorincurred P20,000 direct labor cost as the start of the contractto satisfy the performance obligation, which of the followingstatements is FALSE?[A] The franchisor will initially recognize P20,000 contractasset.[B] The franchisor will initially recognize P100,000contract liability.[C] The franchisor will report P32,000 gross profit for thesecond year.[D] The franchisor will report P20,000 contract liability atthe end of the fourth year.

Franchise Agreement To recognize the revenue in the franchise agreement either in the point of time…

[A] The franchisor will initially recognize P20,000 contract asset. [B] The franchisor will initially recognize P100,000 contract liability. [C] The franchisor will report P32,000 gross profit for the

[A] The franchisor will initially recognize P20,000 contract asset. [B] The franchisor will initially recognize P100,000 contract liability. [C] The franchisor will report P32,000 gross profit for the

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 7C: On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial...

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