a Water Co. enters into the following three franchise agreements on July 1, 20x1: Cash Present Direct Probability of collection down value of Franchisee costs раутеnt 20,000 note incurred A Reasonably assured 60,747 32,000 B Uncertain 20,000 20,000 60,000 48,037 25,000 C Significantly uncertain 33,801 21,520 Totals 142,585 78,520 Additional information: • The down payments are non-refundable and are due at contract inception. • The discount rate on all the notes is 12% and the first installment payments are due on July 1, 20x2. • At contract inception, Water expects to provide Franchisee B a price concession and concludes that it is probable that Franchisee B will pay half of the note. The adjusted present value of the note is P24,018. The discount rate is 12%. • The nature of the licenses is to provide the customers the 'right to use' Water's intellectual property as it exists at grant date. • Water transfers the licenses to the customers on July 1, 20x1. How much is the total profit recognized from the three contracts in 20x1?

a Water Co. enters into the following three franchise agreements on July 1, 20x1: Cash Present Direct Probability of collection down value of Franchisee costs раутеnt 20,000 note incurred A Reasonably assured 60,747 32,000 B Uncertain 20,000 20,000 60,000 48,037 25,000 C Significantly uncertain 33,801 21,520 Totals 142,585 78,520 Additional information: • The down payments are non-refundable and are due at contract inception. • The discount rate on all the notes is 12% and the first installment payments are due on July 1, 20x2. • At contract inception, Water expects to provide Franchisee B a price concession and concludes that it is probable that Franchisee B will pay half of the note. The adjusted present value of the note is P24,018. The discount rate is 12%. • The nature of the licenses is to provide the customers the 'right to use' Water's intellectual property as it exists at grant date. • Water transfers the licenses to the customers on July 1, 20x1. How much is the total profit recognized from the three contracts in 20x1?

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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