How much is the franchise revenue for 2022? On January 1, 2022, ABC Company granted a franchise to a franchisee. The franchise agreementrequired the franchisee to pay a nonrefundable upfront fee in the amount of P600,000 under thefollowing payment scheme:January 1, 2022 P100,000January 1, 2023 300,000January 1, 2024 150,000January 1, 2025 25,000January 1, 2026 25,000The franchise agreement also provides that interest of 2% per annum will be paid every January 1 basedon the unpaid balance. The effective interest rate is 2.5%.Under the franchise agreement, the franchisor is required to do the following:Construct the franchisee's stall with stand-alone price of P400,000.Deliver equipment and suppliesthe franchisee with stand-alone price of P150,000.• Allow the franchisee to use the tradename for a period of five years starting 2022 with stand-aloneprice of P250,000.ABC Company considers each of the following item above is a distinct performance obligation that issatisfied at a point in time.Under the franchise agreement, the tradename will be transferred at the inception of the contract. Thefranchisee's stall was completed on February 1, 2022 while the equipment and supplies were deliveredon February 2, 2022.Round off all present value factors to four decimal places. Round off all final answers to the nearestpeso.

Introduction: Revenue is earned by a corporation that lets a third party conduct a business…

Answered: How much is the franchise revenue for…

Business

Accounting

How much is the franchise revenue for 2022?

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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