At the beginning of the year. Happy Haus got the franchise of Hogan House, a known steak house of upscale patronage. The franchise agreement required a P5,000,000 franchise fee payable P1.000.000 upon signing of the franchise and the balance in four annual installments starting the end of the current year. The existing discount rate is 12. The fees once paid are not refundable. The franchise may be canceled subject to the provisions of the agreement. Should there be unpaid franchise fee attributed to the balance of main fee (P5,000,000). the same would become due and demandable upon cancellation. Further, the franchisor is entitled to a 5% fee on gross sales payable monthly within the first ten days of the following month. The Credit Investigation Bureau rated Happy as A+ credit rating. The balance of the franchise fee was guaranteed by a commercial bank. The first year of operations yielded gross sales of P90
At the beginning of the year. Happy Haus got the franchise of Hogan House, a known steak house of upscale patronage. The franchise agreement required a P5,000,000 franchise fee payable P1.000.000 upon signing of the franchise and the balance in four annual installments starting the end of the current year. The existing discount rate is 12. The fees once paid are not refundable. The franchise may be canceled subject to the provisions of the agreement. Should there be unpaid franchise fee attributed to the balance of main fee (P5,000,000). the same would become due and demandable upon cancellation. Further, the franchisor is entitled to a 5% fee on gross sales payable monthly within the first ten days of the following month. The Credit Investigation Bureau rated Happy as A+ credit rating. The balance of the franchise fee was guaranteed by a commercial bank. The first year of operations yielded gross sales of P90
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of the year. Happy Haus got the franchise of Hogan House, a known steak house of upscale patronage. The franchise agreement required a P5,000,000 franchise fee payable P1.000.000 upon signing of the franchise and the balance in four annual installments starting the end of the current year. The existing discount rate is 12. The fees once paid are not refundable. The franchise may be canceled subject to the provisions of the agreement. Should there be unpaid franchise fee attributed to the balance of main fee (P5,000,000). the same would become due and demandable upon cancellation. Further, the franchisor is entitled to a 5% fee on gross sales payable monthly within the first ten days of the following month. The Credit Investigation Bureau rated Happy as A+ credit rating. The balance of the franchise fee was guaranteed by a commercial bank. The first year of operations yielded gross sales of P90 million. Hogan's earned franchise fees from Happy for the first year of operation amounted to?
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