A P100,000 franchise involves one performance obligation tobe performed over a period of 5 years. If the franchisorincurred P20,000 direct labor cost as the start of the contractto satisfy the performance obligation, which of the followingstatements is FALSE?[A] The franchisor will initially recognize P20,000 contractasset.[B] The franchisor will initially recognize P100,000contract liability.[C] The franchisor will report P32,000 gross profit for thesecond year.[D] The franchisor will report P20,000 contract liability atthe end of the fourth year.

Franchise Agreement To recognize the revenue in the franchise agreement either in the point of time…

[A] The franchisor will initially recognize P20,000 contract asset. [B] The franchisor will initially recognize P100,000 contract liability. [C] The franchisor will report P32,000 gross profit for the

[A] The franchisor will initially recognize P20,000 contract asset. [B] The franchisor will initially recognize P100,000 contract liability. [C] The franchisor will report P32,000 gross profit for the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sheridan Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed-price contract for $2.8 million beginning September 1, 2023, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2025. The following data pertain to the construction period. 2023 Costs to date $850,000 Estimated costs to complete 1,650,000 Progress billings to date (non-refundable) 924,000 Cash collected to date 750,000 2024 $1,782,550 532,450 2,296,000 2,157,000 2025 $2,346,000 0 2,800,000 2,800,000
The fair value of an asset stood at OMR 300 and cost to sell these assets in the market is OMR 40, The preset value of future cash inflows from the asset is OMR 270. What is the recoverable amount? O a. OMR 300. O b. OMR 40. OC OMR 270. O d. OMR 260.
At December 31, 2021, ABC Company has an outstanding purchase commitment with contract purchase price of P 1,000,000 and the market value on this date is P 950,000 which is different from the expected market value of P 990,000. QUESTION: What is the amount of Loss on Purchase Commitment to be recorded at December 31, 2021?
If the actual carrying amount of an asset is R1 500 000 and the historical carrying amount is R900 000, and the fair value is lower than the historical carrying, what is the amount that will be taken to OCI?
Company A purchased company B for $50,000,000. Company B had net assets of $30,000,000, therefore $20,000,000 was paid in excess of the fair value of the net assets. What does this $20,000,000 premium paid by company A represent? In other words, what is this called?
Crane Corporation uses the completed-contract method. At the end of the first year of a $9023000 contract, the following information is available: Costs to date: Estimated costs to complete Progress billings during the year Cash collected during the year $2021000 O $991000 O $247750 O $275000 O $0 6011000 1811000 1536000 In the first year, Crane should recognize gross profit of Crane Corporation uses the co information is available: Costs to date: Estimated costs to complete Progress billings during the y Cash collected during the yea In the first voor Crano should r Snipping Tool Screenshot copied t Select here to mark
Ivanhoe Construction Company uses the percentage-of-completion method of accounting. In 2025, Ivanhoe began work under contract #E2-D2, which provided for a contract price of $2,237,000. Other details follow: Costs incurred during the year Estimated costs to complete, as of December 31 Billings during the year Collections during the year (a) Your answer is correct. Revenue recognized in 2025 Revenue recognized in 2026 LA What portion of the total contract price would be recognized as revenue in 2025? In 2026? (Do not round intermediate calculations.) $ 2025 $616,740 1,006,260 414,000 1,717,000 352,000 2026 $1,441,000 850060 1386940 -0- 1,508,000
Comparable Sale A was recently sold for $736,291. Assume the PGI of the property is $162,064 and its effective gross income is $80,239. The operating expense ratio of the property is 83%. What is the effective gross income multiplier of Sale A?
COL Inc. can either purchase an equipment for $650,000 or lease it from LEN Inc. by making 12 annual lease payments (paid at the beginning of the year) of $89,600. The equipment has CCA rate of 20% and will have salvage value of $56,000 at the end of year 12. Assume this asset is the only asset in the asset class for both companies. LEN’s borrowing cost is 11% which is 1% lower than COL’s. COL and LEN have tax rate of 15% and 40% respectively. a) Calculate the NPV of leasing for COL. b) Calculate the NPV of leasing for LEN. c) Calculate the maximum and minimum annual lease payment acceptable to COL and LEN respectively.
Zentric Garage Inc. enters into a contract to provide services totaling $78,000. The contract includes a potential performance bonus based on when Zentric Garage completes the services. Zentric Garage estimates the following scenarios for completion. (Click the icon to view the scenarios.) Determine the bonus using the most-likely-amount approach. Determine the bonus using the most-likely-amount approach under scenario 1. The bonus for this contract using the most-likely-amount approach under scenario 1 is $ Determine the bonus using the most-likely-amount approach under scenario 2. The bonus for this contract using the most-likely-amount approach under scenario 2 is $ Determine the bonus using the most-likely-amount approach under scenario 3. The bonus for this contract using the most-likely-amount approach under scenario 3 is $ Ente Scenarios Complete within 3 days 5 days 8 days Probability Bonus Scenario 1 Scenario 2 80% 47% 15% 38% 5% 15% $ 13,000 $ 8,000 $ 3,500 Print Done…