On January 2, 2020, Cluckin' Bells Company entered into a franchise agreement with Mr. Princeton to sell thei 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 agreemen 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 firs installment payment was made in due date. The collectability of the note is reasonably assured. 19. In its income statement for the year ended December 31, 2020, how much is the net income? A. 1,548,850 B. 1,810,000 C. 1,818,850 D. 1,978,850

On January 2, 2020, Cluckin' Bells Company entered into a franchise agreement with Mr. Princeton to sell thei 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 agreemen 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 firs installment payment was made in due date. The collectability of the note is reasonably assured. 19. In its income statement for the year ended December 31, 2020, how much is the net income? A. 1,548,850 B. 1,810,000 C. 1,818,850 D. 1,978,850

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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