Photos - Inkedwgkladm_processed_LI.jpgA See all photos+ Add to* Edit & Create vCASE 1On January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license.The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signingof the contract, and the balance is payable in four (4) equal annual installments startingDecember 31, 20X1. The appropriate discount rate is 10%.The contract also requires Marc Company to transfer equipment to the customer. Theequipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has astand-alone selling price of P38,000.Marc Company regularly sells the license and the equipment separately. The equipment istransferred to the customer on January 15, 20x1, while the license is transferred to thecustomer on February 1, 20x1.REQUIRED: Compute the following:2. Transaction price allocated to license3. Transaction price allocated to equipment4. Franchise fee revenue

2) Transaction price allocated to equipment Particulars Amount Allocation based on stand -…

CASE 1 On January 1, 20x1, Marc Company enters into a contract with a customer to trans The initial franchise fee is P200,000, payable as follows: 20% cash down payment of the contract, and the balance is payable in four (4) equal annual installm December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the cu equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The transferred to the customer on January 15, 20x1, while the license is trans customer on February 1, 20x1. REQUIRED: Compute the following: 2. Transaction price allocated to license 3. Transaction price allocated to equipment 4. Franchise fee revenue

CASE 1 On January 1, 20x1, Marc Company enters into a contract with a customer to trans The initial franchise fee is P200,000, payable as follows: 20% cash down payment of the contract, and the balance is payable in four (4) equal annual installm December 31, 20X1. The appropriate discount rate is 10%. The contract also requires Marc Company to transfer equipment to the cu equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The stand-alone selling price of P38,000. Marc Company regularly sells the license and the equipment separately. The transferred to the customer on January 15, 20x1, while the license is trans customer on February 1, 20x1. REQUIRED: Compute the following: 2. Transaction price allocated to license 3. Transaction price allocated to equipment 4. Franchise fee revenue

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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Question

Photos - Inkedwgkladm_processed_LI.jpg
A See all photos
+ Add to
* Edit & Create v
CASE 1
On January 1, 20x1, Marc Company enters into a contract with a customer to transfer a license.
The initial franchise fee is P200,000, payable as follows: 20% cash down payment upon signing
of the contract, and the balance is payable in four (4) equal annual installments starting
December 31, 20X1. The appropriate discount rate is 10%.
The contract also requires Marc Company to transfer equipment to the customer. The
equipment has a cost of P30,000 and a stand-alone selling price of P50,000. The license has a
stand-alone selling price of P38,000.
Marc Company regularly sells the license and the equipment separately. The equipment is
transferred to the customer on January 15, 20x1, while the license is transferred to the
customer on February 1, 20x1.
REQUIRED: Compute the following:
2. Transaction price allocated to license
3. Transaction price allocated to equipment
4. Franchise fee revenue

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See below information from exercise 12-9
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