I. What is the revenue to be recognized by Entity A for the year ended December 31, 2020?A. P 585,000B. P 469,000C. P 424,000D. P 532,000II. On January 1, 2020, Entity A entered into a franchise contract with Entity B whereby the latter is requiredto pay a nonrefundable upfront fee in the amount of P800,000 to Entity A on the date of contract signing.Aside from that, Entity B is required to pay an on-going royalty equivalent to 10% of its sales revenue.The franchise agreement requires Entity A to render the following separate and distinct performanceobligations in relation to the nonrefundable upfront fee:Construction of franchisee's stall with standalone selling price of P500,000.Delivery of 1,000 units of direct materials with standalone selling price of P300,000.Allowing the franchisee to use franchisor's tradename and trademark for a period of 10 years startingJanuary 1, 2020 with standalone selling price of P200,000.As of July 1, 2020, Entity A completed the construction of Entity B's stall. For the year ended December31, 2020, Entity A was able to deliver 600 units of direct materials to Entity B. Entity B reported P250,000sales revenue during 2020.

Name: I. What is the revenue to be recognized by Entity A for the year ended
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Description: I. What is the revenue to be recognized by Entity A for the year ended December 31, 2020?A. P 585,000B. P 469,000C. P 424,000D. P 532,000II. On January 1, 2020, Entity A entered into a franchise contract with Entity B whereby the latter is requiredto

Particulars Stand-alone amount Revenue Royalty $25000 Non-Refundable Fees: Construction…

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Business

Accounting

What is the revenue to be recognized by Entity A for the year ended December 31, 2020?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 7DQ

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