Photos - Inkedwgkladm_processed_LI.jpgA See all photos+ Add to* Edit & Create vCASE 1On January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license.The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signingof the contract, and the balance is payable in four (4) equal annual installments startingDecember 31, 20X1. The appropriate discount rate is 10%.The contract also requires Marc Company to transfer equipment to the customer. Theequipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has astand-alone selling price of P38,000.Marc Company regularly sells the license and the equipment separately. The equipment istransferred to the customer on January 15, 20x1, while the license is transferred to thecustomer on February 1, 20x1.REQUIRED: Compute the following:2. Transaction price allocated to license3. Transaction price allocated to equipment4. Franchise fee revenue

2) Transaction price allocated to equipment Particulars Amount Allocation based on stand -…

CASE 1 On January 1, 20x1, Marc Company enters into a contract with a customer to trans The initial franchise fee is P200,000, payable as follows: 20% cash down payment of the contract, and the balance is payable in four (4) equal annual installm December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the cu equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The transferred to the customer on January 15, 20x1, while the license is trans customer on February 1, 20x1. REQUIRED: Compute the following: 2. Transaction price allocated to license 3. Transaction price allocated to equipment 4. Franchise fee revenue

CASE 1 On January 1, 20x1, Marc Company enters into a contract with a customer to trans The initial franchise fee is P200,000, payable as follows: 20% cash down payment of the contract, and the balance is payable in four (4) equal annual installm December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the cu equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The transferred to the customer on January 15, 20x1, while the license is trans customer on February 1, 20x1. REQUIRED: Compute the following: 2. Transaction price allocated to license 3. Transaction price allocated to equipment 4. Franchise fee revenue

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 2EA: Marx Corp. purchases 135 fax machines on credit from a manufacturer on April 7 at a price of $250...

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On January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license. The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signing of the contract, and the balance is payable in four (4) equal annual installments starting December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the customer. The equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has a stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The equipment is transferred to the customer on January 15, 20x1, while the license is transferred to the customer on February 1, 20x1. REQUIRED: Compute for the following Total transaction price Transaction price allocated to the license Transaction price allocated to equipment Franchise fee revenue
C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2015, to advance Jeff$50,000 on a one-year, 8 percent note, with interest to be paid at maturity on February 28, 2016.CSM prepares financial statements on June 30 and December 31.Required:1. Prepare the journal entry that CSM will make when the note is established.2. Prepare the journal entries that CSM will make to accrue interest on June 30 and December 31.3. Prepare the journal entry that CSM will make to record the interest and principal payments onFebruary 28, 2016.
C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2018, to advance Jeff $30,000 on a one-year, 7 percent note, with interest to be paid at maturity on February 28, 2019. CSM prepares financial statements on June 30 and December 31. Prepare the journal entry CSM will make when the note is established, accrue interest on June 30 and December 31, and the interest and principal payments on February 28, 2019. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount.) Record the receipt of a note on February 28, 2018 for a $30,000 loan to an employee. (Note: Enter debits before credits.) Date General Journal Debit Credit Feb 28, 2018 [ ] […
a) ABC Lid acquired a new packing line from QE Ltd on hire purchase on January 1, 201 1. The cash price (list price) was GHS54,000. The hire purchase agreement is as follows: • Initial deposit payment of GH59,000 on January 1, 2011; Payment of two annual instalment of GHS24,000 on December 31 of 2011, 2012 and a final instalment of GHS20,39 1 on December 31, 2013. • Implicit rate of interest is 25% per annum. It is the policy of ABC to depreciate the PL on straight line basis over 10 years, with no salvage value. Required: Show the ledger entries for the above transactions in the books of ABC Ltd b) On 1 October 2018 XYZ Ltd acquired a machine under the following terms. Hours Manufacturer's base price Trade discount (applying to base price only) Early settlement discount taken (on the payable amount of the base cost only) Freight charges Electrical installation cost Staff training in use of machine Preproduction testing Purchase of a three-year maintenance contract Estimated residual…
C&S Marketing (CSM) recently hired a new marketing director, Jeff Otos, for its downtown Minneapolis office. As part of the arrangement, CSM agreed on February 28, 2021, to advance Jeff $35,000 on a one-year, 7 percent note, with interest to be paid at maturity on February 28, 2022. CSM prepares financial statements on June 30 and December 31. Required: Prepare the journal entries that CSM will make: (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to whole dollar amount.) When the note is established To record the interest accruals at each quarter-end and interest payments at each payment date to record the principal payment at the maturity date
Fred Esquillo, Inc charges an initial franchise fee of P90,000 broken down as follows:Rights to trade name, market area, and proprietary know-how . . . . . . . . . P40,000Training services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500Equipment (cost of P10,800) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,500Total initial franchise fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P90,000Upon signing of the agreement, a payment of P40,000 is due. Thereafter, two annual payments ofP30,000 are required. The credit rating of the franchisee is such that it would have to pay interest of8% to borrow money. The franchise agreement is signed on August 1. 20x7. Assuming that no futureservices are required by the franchisor once the franchise begins operations, the entry on November1, 20x7 would include-A credit to Unearned Franchise Revenue for P40,000.-A debit to…
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4.FOR NUMBERS 4 - 6:Brilliant Company sold a franchise to sell its products for P5,000,000 on January 1, 2021. The initial fee is payable P500,000 upon signing of the contract and the balance in 5 equal installments every December 31, evidenced by a 12% promissory note. The agreement provides that the franchisor will assist in the location of site, supervision of the building construction, project study or market survey, assistance in the acquisition of facilities, training and management of personnel, quality control, advertising and promotion. It was also agreed that the franchisee will pay a royalty fee equal to 5% of its average sales every calendar year. The franchise outlet was opened on May 1, 2021 and the average monthly sales of the franchisee is P100,000. The franchisor has incurred P1,500,000 related to the services required by the contract.1. How much is the Initial Franchise Fee Revenue to be recognized in 2021?
Please answert it in good accounting form. Thankyou Problem 5SHAWARMA Inc. sells franchises to independent operators. The contractwith the franchise includes the following provisions: 1. The franchise is charged an initial franchise fee of P120,000. Of this amount, P20,000 is payable when the agreement is signed and a P20,000, zero-interest bearing note, payable at the end of 5 subsequent years.2. All of the initial franchise fee collected by the company is to be refunded and the remaining obligation cancelled if, for any reason, the franchise becomes unprofitable.3. In return, for the initial franchise fee, the franchisor agrees to (a) assist the franchisee in selecting the location for the business, (b) negotiate the lease of the land, (c) obtain financing and assist with building design, (d) supervise construction, establish accounting and tax records, and (f) provide expert advice over a 5-year period relating to such matters as employee and management training, quality, control…
1. ABC Island, Inc. charges an initial franchise fee of ₱75,000 for the right to operate as a franchisee of ABC Island. Of this amount, ₱25,000 is collected immediately. The remainder is collected in four equal annual installments of ₱12,500 each. These installments have a present value of ₱41,402. As part of the total franchise fee, Frozen Delight also provides training (with a fair value of ₱2,000) to help franchisees get the store ready to open. The franchise agreement is signed on April 1, 2020, training is completed, and the store opens on July 1, 2020. The amount of total revenue from training and franchise on July 1, 2020 is? 64,402 66,402 75,000 0
Pacific Crossburgers Inc. charges an initial fee of P70,000. Upon the signing of the agreement (which covers 3 years), a payment of P28,000 is due. Thereafter, three (3) annual payments of P14,000 are required. The credit rating of the franchisee is such that it would have to pay interest at 10% to borrow money. The franchise agreement signed on May 1, 20x5, and the franchise commences operation on July 1, 20x5. Assuming that the total franchise fee includes training services (with a value of P2,400) for the period leading up to the franchise opening and for two (2) months following opening.
On January 1, 20x1, HYBE acquired a machine by using a 3%, P4,000,000 note due on January 1, 20x4. Interest is payable semi-annually. The effective interest rate is 12%. The carrying amount on initial recognition is 3,114,884. How to get the carrying amount on initial recognition?