NEED ASAP PROBLEM 7-5On March 1, 2019, Tokyo entered into a franchise contract with Gee Friends. Anon-refundable upfront fee amounting to P1,440,000 was paid by Gee Friends plus5% royalty payment equivalent to 5% of the sales. In relation to the nonrefundableupfront fee, the franchise agreement required Tokyo to render the followingperformance obligations to Gee Friends:To construct the franchisee's stall with stand-alone selling price ofP300,000. Chapter 7-Revenue from Contracts withthe similar items (cooking equipment and cash registers) is valued atTo supply cooking equipment and cash registers. Price of competitors for• To deliver 10,000 units of raw materials with stand-alone selling price ofP240,000 plus an appropriate margin above cost of 25%.P460,000.To allow Gee Friends to use the entity's tradename for a period of 10 yearsstarting on the inception of the contract with standalone selling price ofP600,000.In 2019, Tokyo satisfied its performance obligations to supply cooking equipmentand install cash registers, constructed the franchisee's stall and was able to deliver6,000 units of materials to Gee Friends. Also, the franchisee reported sales revenueamounting to P720,000. The entity had determined that the performanceobligations are separate and distinct from one another and accounted under PFRS15.Required: Use the 5-step model to analyse the problem and give all entries required fromdate of signing up to end of year 2019.

Given in the question: Franchise Contract Date March 1, 2019 Non-Refundable…

Answered: Required: Use the 5-step model to…

Required: Use the 5-step model to analyse the problem and give all entries required from date of signing up to end of year 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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