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?
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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