On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments. It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would be:

On July 1, 2011, ABC, a franchisor, entered into a franchise agreement with EEE, a franchisee. The total franchise fees agreed upon is P2,100,000 of which P100,000 is payable upon signing and the balance payable in four annual installments. It was agreed that the down payment is non-refundable, notwithstanding lack of substantial performance of services by franchisor. The deferred revenue from franchise fee to be reported in the July 31, 2011 financial statements of AAA would be:

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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