At the beginning of current year, Hart Company si agreement to operate as a franchisee for an initial franchise fee of P6,000,000. What amount should be recorded as initial cost of the Present value of 1 at 14% for 4 periods Present value of an ordinary annuity of On the same date, the entity paid P2,000,000 and agreed to pay the balance in four equal annual payments of P1,000,000 at every year-end. The down payment is not refundable and no future services are required of the franchisor. The entity can borrow at 14% for a loan of this type. 0.59 1.69 Future amount of 1 at 14% for 4 periods 2.91 1 at 14% for 4 periods What amount should be recorded as initial cost of the franchise? a. 6,760,000 b. 6,000,000 C. 4,910,000 d. 4,360,000

At the beginning of current year, Hart Company si agreement to operate as a franchisee for an initial franchise fee of P6,000,000. What amount should be recorded as initial cost of the Present value of 1 at 14% for 4 periods Present value of an ordinary annuity of On the same date, the entity paid P2,000,000 and agreed to pay the balance in four equal annual payments of P1,000,000 at every year-end. The down payment is not refundable and no future services are required of the franchisor. The entity can borrow at 14% for a loan of this type. 0.59 1.69 Future amount of 1 at 14% for 4 periods 2.91 1 at 14% for 4 periods What amount should be recorded as initial cost of the franchise? a. 6,760,000 b. 6,000,000 C. 4,910,000 d. 4,360,000

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

renewal had a full depreciation
warehouse The had an to the lease
During the improvement
On is the of the
to the The of was P540,000
on this for 2021.
On the to the
Problem 34-21 (AICPA Adapted)
At the beginning of current year, Hart Company signed an
agreement to operate as a franchisee for an initial franchise
fee of P6,000,000.
On the same date, the entity paid P2,000,000 and agreed to
pay the balance in four equal annual payments of P1,000,000
at every year-end.
The down payment is not refundable and no future services
are required of the franchisor. The entity can borrow at 14%
for a loan of this type.
Present value of 1 at 14% for 4 periods
0.59
Present value of an ordinary annuity of
1 at 14% for 4 periods
What amount should be recorded as initial cost of the
franchise?
a.
6,760,000
b. 6,000,000
C.
4,910,000
d. 4,360,000
Problem 34-22 (AICPA Adapted)
On January 1, 2019, Averse Company signed a 12-year lease for
an additional 8-year period on or before January 1, 2022.
i this leasehold improvement for 2021.
he
b.
C. 510,000
d.
513,000
266

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