On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are that ABC is required to pay a non-refundable initiation gee of P7,200 and a membership fee of P1,800 per month. XYZ determine that its customers on average, renew their annual membership two times before terminating their membership. Case 1: How many performance obligations exists in the contract for membership fee agreement? a. 0 b. 1 c. 2 d. 3 Case 2: The transaction price of this arrangement-non refundable upfront fee should be a. 0 b. 7,200 c. 64,800 d. 72,000 Case 3: What is the revenue per year? a. 7,200 b. 10,000 c. 12,600 d. 24,000
On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are that ABC is required to pay a non-refundable initiation gee of P7,200 and a membership fee of P1,800 per month. XYZ determine that its customers on average, renew their annual membership two times before terminating their membership. Case 1: How many performance obligations exists in the contract for membership fee agreement? a. 0 b. 1 c. 2 d. 3 Case 2: The transaction price of this arrangement-non refundable upfront fee should be a. 0 b. 7,200 c. 64,800 d. 72,000 Case 3: What is the revenue per year? a. 7,200 b. 10,000 c. 12,600 d. 24,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2030, ABC granted a 3 year franchise contract with XYZ. The terms of the contract are that ABC is required to pay a non-refundable initiation gee of P7,200 and a membership fee of P1,800 per month. XYZ determine that its customers on average, renew their annual membership two times before terminating their membership.
Case 1: How many performance obligations exists in the contract for membership fee agreement?
a. 0
b. 1
c. 2
d. 3
Case 2: The transaction price of this arrangement-non refundable upfront fee should be
a. 0
b. 7,200
c. 64,800
d. 72,000
Case 3: What is the revenue per year?
a. 7,200
b. 10,000
c. 12,600
d. 24,000
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