On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly. How much is the total revenue recognized by A for the year ended 2020?
On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly. How much is the total revenue recognized by A for the year ended 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On May 31, 2020, A grants B the right to operate as a franchisee of "Sprite" for a nonrefundable upfront fee of P2,400,000 and 3% royalty fee based on B's annual sales. A in return will (1) assist B in locating the site, (2) provide supplies and equipment, and (3) allow B to use the tradename for 10 years. B's income for the year totaled P1,000,000. A has no performance obligation (PO) remaining as of year-end and was able to recognize income of P28,000 from PO#3. A determined that each PO is separate and distinct from one another and follows PFRS 15, accordingly.
How much is the total revenue recognized by A for the year ended 2020?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education