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
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    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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