In 2020, Lihim na Pagtingin Designs Corp. sold a layout design to Masaya Inc. and will receive royalties of 20% of future revenues associated with the said design. On December 31, 2020, Lihim na Pagtingin Designs reported royalty receivable of P75,000 from Masaya Inc. During 2021, Lihim na Pagtingin Design received a royalty payment of P200,000. Masaya Inc. reported revenues of P1,500,000 in 2021 from the layout design. In the 2021 income statement, what should Lihim na Pagtingin Designs report as royalty revenue? *

In 2020, Lihim na Pagtingin Designs Corp. sold a layout design to Masaya Inc. and will receive royalties of 20% of future revenues associated with the said design. On December 31, 2020, Lihim na Pagtingin Designs reported royalty receivable of P75,000 from Masaya Inc. During 2021, Lihim na Pagtingin Design received a royalty payment of P200,000. Masaya Inc. reported revenues of P1,500,000 in 2021 from the layout design. In the 2021 income statement, what should Lihim na Pagtingin Designs report as royalty revenue? *

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 2, 2020, Cluckin' Bells Company entered into a franchise agreement with Mr. Princeton to sell their products. The agreement provides for an initial franchise fee of P2,500,000, payable as follows: P700,000 cash to be paid upon signing of the contract, and the balance in five equal annual payments every December 31, starting December 31, 2020. Cluckin' Bells Company signs 15% interest bearing note for the balance. The agreement further provides that the franchisee must pay a continuing franchise fee equal to 5% of its monthly gross sales. On October 29, the franchisor completed the initial services required in the contract at a costs of P800,000, and incurred indirect costs of P160,000. The franchisee commenced business operations on November 2, 2020. The gross sales reported to the franchisor are November sales, P82,000 and December sales, P95,000. The first installment payment was made in due date. The collectability of the note is reasonably assured. 19. In its income…
On July 3, 2020, Franky purchased on account specialty feeds worth P800,000 net of VAT. A wholesaler operating in the region bought for cash all of the available feeds on July 18, 2020; amount of cash received was P1,120,000 gross of VAT. Franky remitted the value added tax due to the BIR within the month. What is the VAT payable paid by Franky for the month of July? O A. 34,285.71 В. О О с 38,400 О D. 24,000
Sprocket, Inc. ships 150 widgets (cost $500/unit) to Bender Co. on consignment on March 31, 2022. By June 30, 2022, Bender sold 90 of the consigned widgets at the price of $800 per unit. Bender notifies Sprocket of the sales, retains an 8% commission, and remits the cash due to Sprocket. Prepare the appropriate journal entries for Sprocket on June 30 Please dont provide answer in an image format thank you
A On January 1. 2020. Machinery Corp. enters into a contract with a customer for the sale of a machine and related one year maintenance services for a total contract price of P2000.000. Machinery Corp. regularly sells these items separately. If they were to be purchased separately, their stand-alone selling prices are as follows: P1.800.000 for the machines and P600.000 for the one-year maintenance services Machinery Corp transfers the machine, and collects the total contract price on February 1, 2020 The maintenance services start on that date. Required Analyze the five steps of model of revenue recognition
Screen Co. assigns some of its patents to other enterprises under a variety of licensing agreements . In some instances, advance royalties are received when the agreements are signed, and in others, royalties are remitted within sixty days after each license year-end. The following data are included in Screen Co.'s December 31 balance sheet : 2019 2020 Royalties receivable Unearned royalties 100,000 70,000 95,000 50,000 During 2020 Screen Co. received royalties' remittances of P200,000 . How much should Screen Co. report as royalty income in its income statement for the year ended December 31, 2020?
On January 1, 2018, DMCI Company started the construction of a building at a fixed contract price ofP1,000,000. On the same date, the customer paid a mobilization fee equal to 5% of contract price that will be deductible from the first billing. The outcome of construction contract cannot be estimated reliably During 2018, the entity billed the customer equivalent to 30% of the contract price. During 2019, the entity billed again the customer amounting to 20% of the contract price. During 2020, the entity billed again the customer amounting to 40% of the contract price. The remaining billing was made at the year of completion of the project. The entity made collection from the customer at the end of 2018, 2019 and 2020, in the amount of P120,000, P450,000 and P180,000, respectively. The entity provided the following data concerning the direct costs related to the said project: 2018 2019 2020 Cumulative costs incurred at year-end 360,000 800,000 870,000 Remaining estimated costs to…
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $676 million in sales of this type. Scheduled collections for these sales are as follows: 2021 $ 83 million 2022 137 million 2023 129 million 2024 162 million 2025 165 million $ 676 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2021 balance sheet?
On May 3, 2020, Vaughn Company consigned 90freezers, costing $470each, to Remmers Company. The cost of shipping the freezers amounted to $870and was paid by Vaughn Company. On December 30, 2020, a report was received from the consignee, indicating that45freezers had been sold for $750each. Remittance was made by the consignee for the amount due after deducting a commission of6%, advertising of $180, and total installation costs of $310on the freezers sold. (Round answers to O decimal places, e.g. 5,275.) (a) Compute the inventory value of the units unsold in the hands of the consignee. Inventory value $ (b) Compute the profit for the consignor for the units sold. Profit on consignment sales $ (c) Compute the amount of cash that will be remitted by the consignee. Remittance from consignee $
A court case decided on December 2020 awarded damages against Talunan Corp. The judge has announced that the amount of damages will be set at a future date, expected to be in March 2021. Talunan Corp has received advice from its lawyers that the amount of the damages could be anything between P400,000 and P1,400,000. As of December 31, 2020, how much liability should be recognized in the balance sheet regarding this court case? P900,000 b. P1,400,000 c. P400,000 d. P0
During 2020, Univ Company signed a non-cancellable contract with Univy to purchase 1,000 tons of cotton at P1, 200 with delivery to be made in 2021. On December 31, 2020, the price of cotton had fallen for P1,150 per ton. The company expects delivery of cotton when the price is P1,180 per ton on April 2021. What amount of gain from recovery of loss on purchase commitment, if any, should be recognized by Univ in 2021?
On January 2021 Bob Company sells an item of machinery to Jaison Company for its fair value of $300,000. The asset had a carrying amount of $120,000 prior to the sale. The sale represents the satisfaction of a performance obligation, in accordance with IFRS 15 Revenue from Contracts with Customers. Bob Company enters on to a contracte with Jaison Company for the right to use the asset for the next five years. Annual payments of $50,000 are due at the end of each year. The interest rate implicit in the lease is 10%. The present value of the annual lease payments is $190,000. The remaining useful life of the machine is much greater than the lease term. Required: 1. Explain how it will be recorded in the books of Bob Company and show the necessary journal entries. 2. Why do companies prefer lease financing instead of direct purchase? Explain any three valid reasons.
On January 1, 2021, Crucell N.V. sold an aeroengine along with a 4 year maintenance agreement to Sleazyjet Airlines for $1164. The standalone selling price of an engine is $776, while the standalone selling price of a maintenance contract is $194 per year. On January 1, the aeroengine was delivered to Sleazyjet. Ignoring the time value of money, the company should record revenue on January 1 of: 1164 931 970 None of these answers is correct 776 582