At the beginning of current year, Hart Company si agreement to operate as a franchisee for an initial franchise fee of P6,000,000. What amount should be recorded as initial cost of the Present value of 1 at 14% for 4 periods Present value of an ordinary annuity of On the same date, the entity paid P2,000,000 and agreed to pay the balance in four equal annual payments of P1,000,000 at every year-end. The down payment is not refundable and no future services are required of the franchisor. The entity can borrow at 14% for a loan of this type. 0.59 1.69 Future amount of 1 at 14% for 4 periods 2.91 1 at 14% for 4 periods What amount should be recorded as initial cost of the franchise? a. 6,760,000 b. 6,000,000 C. 4,910,000 d. 4,360,000

At the beginning of current year, Hart Company si agreement to operate as a franchisee for an initial franchise fee of P6,000,000. What amount should be recorded as initial cost of the Present value of 1 at 14% for 4 periods Present value of an ordinary annuity of On the same date, the entity paid P2,000,000 and agreed to pay the balance in four equal annual payments of P1,000,000 at every year-end. The down payment is not refundable and no future services are required of the franchisor. The entity can borrow at 14% for a loan of this type. 0.59 1.69 Future amount of 1 at 14% for 4 periods 2.91 1 at 14% for 4 periods What amount should be recorded as initial cost of the franchise? a. 6,760,000 b. 6,000,000 C. 4,910,000 d. 4,360,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 64E

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