Problem 2: GHI Corporation entered into a 20-year franchise that allows IS DUN ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total cost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to BAGUIO CITY receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. Required: 5. Revenue from sale of supporting assets 6. Initial franchise revenue for the first year 7. Continuing franchise revenue for the first year Interest revenue for the first year 8.

Problem 2: GHI Corporation entered into a 20-year franchise that allows IS DUN ZZ Corporation the right to use its intellectual property. As part of the standard contract, ZZ gave P500,000 as down payment and a P2,000,000 note that requires equal annual payments over ten years. The down payment is for the supporting assets (equipment and inventory) with total cost of P300,000 and stand-along price of P500,000 to GHI. The prevailing market interest rate of similar notes is 9%. GHI is also to BAGUIO CITY receive royalty of 3% of ZZ's revenue each year end. ZZ earned revenues of P10,000,000 during the first year. Required: 5. Revenue from sale of supporting assets 6. Initial franchise revenue for the first year 7. Continuing franchise revenue for the first year Interest revenue for the first year 8.

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 11P

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