Xaviery Computers is a franchisor and provides a range of computing services hardware/software installation, repairs, data backup, device syncing, and network solutions) on popular Samsung, Dell, Acer, and other PC devices. Each franchise agreement gives a franchisee the right to open a Xaviery outlet and sell Xavierys' products and services in the area for five (5) years. Under the contract, Xaviery also provides the franchisee with a number of services to support and enhance the franchise brand, including: -advising and consulting on the operations of the store; -communicating new hardware and software developments, and service techniques; -providing business and training manuals; and -advertising programs and training. As an almost entirely service operation (all materials and other supplies are purchased as needed by customers), Xaviery provides few upfront services to franchisees. Instead, the franchisee recruits service technicians, who are given Xavierys' training materials (online manuals and tutorials), which are updated for technology changes, on a monthly basis at a minimum. Xaviery enters into a franchise agreement on December 15, 20x7, giving a franchisee the rights to operate a Xaviery franchise in Cagayan Valley for five (5) years. Xaviery charges an initial franchise fee of P975,000 for the right to operate as a franchisee, payable upon signing the contract. Xaviery also receives ongoing royalty payments of 7% of the franchisee's annual sales (payable each January 11 of the following year). 11. How many performance obligations exist in this contract for franchise? a. none b. 1 c. 2 d. 3 12. The franchise revenue should be recognized: a. No transaction b. No revenue c. Point in time d. Over time
Xaviery Computers is a franchisor and provides a range of computing services hardware/software installation, repairs, data backup, device syncing, and network solutions) on popular Samsung, Dell, Acer, and other PC devices. Each franchise agreement gives a franchisee the right to open a Xaviery outlet and sell Xavierys' products and services in the area for five (5) years. Under the contract, Xaviery also provides the franchisee with a number of services to support and enhance the franchise brand, including: -advising and consulting on the operations of the store; -communicating new hardware and software developments, and service techniques; -providing business and training manuals; and -advertising programs and training. As an almost entirely service operation (all materials and other supplies are purchased as needed by customers), Xaviery provides few upfront services to franchisees. Instead, the franchisee recruits service technicians, who are given Xavierys' training materials (online manuals and tutorials), which are updated for technology changes, on a monthly basis at a minimum. Xaviery enters into a franchise agreement on December 15, 20x7, giving a franchisee the rights to operate a Xaviery franchise in Cagayan Valley for five (5) years. Xaviery charges an initial franchise fee of P975,000 for the right to operate as a franchisee, payable upon signing the contract. Xaviery also receives ongoing royalty payments of 7% of the franchisee's annual sales (payable each January 11 of the following year). 11. How many performance obligations exist in this contract for franchise? a. none b. 1 c. 2 d. 3 12. The franchise revenue should be recognized: a. No transaction b. No revenue c. Point in time d. Over time
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 7DQ
Related questions
Question
Xaviery Computers is a franchisor and provides a range of computing services hardware/software installation,
repairs, data backup, device syncing, and network solutions) on popular Samsung, Dell, Acer, and other PC
devices. Each franchise agreement gives a franchisee the right to open a Xaviery outlet and sell Xavierys'
products and services in the area for five (5) years. Under the contract, Xaviery also provides the franchisee with
a number of services to support and enhance the franchise brand, including:
-advising and consulting on the operations of the store;
-communicating new hardware and software developments, and service techniques;
-providing business and training manuals; and
-advertising programs and training.
As an almost entirely service operation (all materials and other supplies are purchased as needed by customers),
Xaviery provides few upfront services to franchisees. Instead, the franchisee recruits service technicians, who
are given Xavierys' training materials (online manuals and tutorials), which are updated for technology changes,
on a monthly basis at a minimum.
Xaviery enters into a franchise agreement on December 15, 20x7, giving a franchisee the rights to operate a
Xaviery franchise in Cagayan Valley for five (5) years. Xaviery charges an initial franchise fee of P975,000 for
the right to operate as a franchisee, payable upon signing the contract. Xaviery also receives ongoing
royalty payments of 7% of the franchisee's annual sales (payable each January 11 of the following year).
11. How many performance obligations exist in this contract for franchise?
a. none
b. 1
c. 2
d. 3
12. The franchise revenue should be recognized:
a. No transaction
b. No revenue
c. Point in time
d. Over time
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT