Pita Pal sells fast-food franchises. Pita Pal receives $79,000 from a new franchisee for providing initial training, equipment, and furnishings that together have a stand-alone selling price of $79,000. Pita Pal also receives $37,200 per year for use of the Pita Pal name and for ongoing consulting services (starting on the date the franchise is purchased). Rachel became a Pita Pal franchisee on March 1, 2021, and on May 1, 2021 Rachel had completed training and was open for business. How much revenue in 2021 will Pita Pal recognize for its arrangement with Rachel? Multiple Choice $79,000 $110,000 $0
Pita Pal sells fast-food franchises. Pita Pal receives $79,000 from a new franchisee for providing initial training, equipment, and furnishings that together have a stand-alone selling price of $79,000. Pita Pal also receives $37,200 per year for use of the Pita Pal name and for ongoing consulting services (starting on the date the franchise is purchased). Rachel became a Pita Pal franchisee on March 1, 2021, and on May 1, 2021 Rachel had completed training and was open for business. How much revenue in 2021 will Pita Pal recognize for its arrangement with Rachel? Multiple Choice $79,000 $110,000 $0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Pita Pal sells fast-food franchises. Pita Pal
receives $79,000 from a new franchisee for
providing initial training, equipment, and
furnishings that together have a stand-alone
selling price of $79,000. Pita Pal also receives
$37,200 per year for use of the Pita Pal name
and for ongoing consulting services (starting on
the date the franchise is purchased). Rachel
became a Pita Pal franchisee on March 1, 2021,
and on May 1, 2021 Rachel had completed
training and was open for business. How much
revenue in 2021 will Pita Pal recognize for its
arrangement with Rachel?
Multiple Choice
$79,000
$110,000
$0
$116,200
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Why do you divide $37200 in 10 months? My confusion is that the problem says in Mar and in May.
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