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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 installmen

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 installmen

FINANCIAL ACCOUNTING
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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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:

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