Apple creates a franchise for the sale of a particular product. Apple incurs $600,000 initial direct costs for each franchise granted. At December 31, 2016, Apple granted the following people franchises that have open accounts with Apple. ABCDCash paid (Down payment)200,000200,000200,000200,000 Note unpaid (Face 1,000,000)700,000400,000910,000550,000Services completed25%10%95%100%Probability of collectionLikelyUnlikelyUnlikelyLikelyContinuing Franchise fee1% of NI1% of NI1% of NI1% of NIPeriod of refundJanuary 31, 2017February 28, 2017December 30, 2016December 30, 2016 What is the total revenue to be recognized by Apple on December 31,2016?

Answered: A B C D Cash paid (Down payment)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Apple creates a franchise for the sale of a particular product. Apple incurs $600,000 initial direct costs for each franchise granted. At December 31, 2016, Apple granted the following people franchises that have open accounts with Apple.

	A	B	C	D
Cash paid (Down payment)	200,000	200,000	200,000	200,000
Note unpaid (Face 1,000,000)	700,000	400,000	910,000	550,000
Services completed	25%	10%	95%	100%
Probability of collection	Likely	Unlikely	Unlikely	Likely
Continuing Franchise fee	1% of NI	1% of NI	1% of NI	1% of NI
Period of refund	January 31, 2017	February 28, 2017	December 30, 2016	December 30, 2016

What is the total revenue to be recognized by Apple on December 31,2016?

Expert Solution

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions