Jolibi, Inc. enters into an agreement with Ronald’s Co., clothing the later with full authority to operate as its franchise for a period of ten years. An initial franchise fee of P 275,000, among others, was stipulated in the contract and was promptly paid during the year 2008. Assuming that Jolibi was able to perform the initial services during 2008, what is the franchise revenue to be recognized in its year-end income statement? P 0 P 27,500 P 137,500 P 275,000

Jolibi, Inc. enters into an agreement with Ronald’s Co., clothing the later with full authority to operate as its franchise for a period of ten years. An initial franchise fee of P 275,000, among others, was stipulated in the contract and was promptly paid during the year 2008. Assuming that Jolibi was able to perform the initial services during 2008, what is the franchise revenue to be recognized in its year-end income statement? P 0 P 27,500 P 137,500 P 275,000

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

1. Jolibi, Inc. enters into an agreement with Ronald’s Co., clothing the later with full authority to operate as its franchise for a period of ten years. An initial franchise fee of P 275,000, among others, was stipulated in the contract and was promptly paid during the year 2008.
Assuming that Jolibi was able to perform the initial services during 2008, what is the franchise revenue to be recognized in its year-end income statement?
1. P 0
2. P 27,500
3. P 137,500
4. P 275,000

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