On January 3, 2008, PP Services, Inc. signed an agreement authorizing CC Company to operate as a franchisee over
On January 3, 2008, PP Services, Inc. signed an agreement authorizing CC Company to operate as a franchisee over
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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- On January 3, 2008, PP Services, Inc. signed an agreement authorizing CC Company to operate as a franchisee over a 20-year period for an initial franchise fee of P 50,000 received when the agreement was signed. CC commenced operations on July 1, 2008, at which date all of the initial services required of PP had been performed. The agreement also provides that CC must pay annually to PP a continuing franchise fee equal to 5% of the revenue from the franchise. CC’s franchise revenue for 2008 was P 400,000. For the year ended December 31, 2008, how much should PP record as revenue from franchise fees in respect of the CC’s franchise?
- P 70,000
- P 50,000
- P 45,000
- P 22,500
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