On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly. How much is the total revenue recognized by A for the year ended 2020?
On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly. How much is the total revenue recognized by A for the year ended 2020?
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 30CE
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On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly.
How much is the total revenue recognized by A for the year ended 2020?
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