ABC Inc. agreed with DEF Corp. a franchise agreement that allows DEF the right to access an online reference website owned by ABC. The term of the agreement is 3 years. The original initial fee is P1,200,000 but they agreed that by also purchasing a computer unit originally priced at P300,000 from ABC, they can agree for a total price of P1,410,000. ABC immediately delivered the unit while DEF immediately paid the total price. The right to access was also provided on the same day. At what amount should the contract liability be reported at as of the end of the first year?

AGI software inc entered into a $250,000 contract with mcdonald company to transfer a software license, perform the related installation service and provide a tech support for three-year period. AGI sells the license to the software, installation service, and tech support as a bundle of product for a lump-sum price. the installation service and tech support could be performed by other entities and there is a ready market for those services. the stand-alone prices for software, installation service, and tech support service were 160,000 20,000 and 30,000 per year (i.e., total of 90,000 for three years) respectively.   The contract was finalized on march 1 2020. AGI delivered the software license on april 1 2020 when its title was transferred to mcdonald. AGI completed installation on may 15 2020 at which point the tech support service will begin covering a period of three years.   Upon installation of software on may 15, mcdonald paid for the software, installation service, and one-year…

Kami, Inc. charges an initial franchise fee of P500,000 for the right to operate to operate as a franchise of Kami. Of this amount, P100,000 is payable when the agreement was signed and the balance is payable in a noninterest bearing note in five annual payments of P80,000 each. In return for the initial franchise fee, the franchisor will help locate the site, negotiate the lease or purchase of the site, supervise the construction activity, and provide the bookkeeping services. The credit rating of the franchisee indicates that money can be borrowed at 8%. The present value of an ordinary annuity of five annual receipts of P80,000 each discounted at 8% is P319,416.80. The discount represents the interest revenue to be accrued by the franchisor over the payment period. If the probability of refunding the initial franchise fee is extremely low, the amount of future services to be provided to the franchisee is minimal, collectability of the note is reasonably assured and substantial…

Annalise Inc., agrees to transfer television sets to Keating Co. on a consignment basis. The consignee is to sell a set at 40% gross profit and is to receive a 10% commission on sales price. The company account all the inventoriable costs before setting the selling price. The consignor agrees to reimburse the consignee for all expenses related to the consignment. The agreement also calls for an advance payment by the consignee of 20% per set based on selling price; the said advance is to be deducted as settlement is made for each set sold and returned. The consignee is to provide an account sale quarterly and is to make cash remittance for the amount owed at that time. The following consignment sales activities occurred during the October 1 to December 31 of current year:Sets shipped – 100; Manufacturing cost per set – P 12,000; Freight charges on the shipment paid by the consignor – P 60,000; The consignee made advance payments on the sets received; Advertising cost paid by the…