On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments. It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would be:
On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments. It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees
agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments.
It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by
franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would
be:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F931f8028-c645-4c8d-bb60-5218220311a5%2F9ed93902-0399-494a-b856-252ff909cf58%2Fpjvren_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees
agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments.
It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by
franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would
be:
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